WAMI plans common regulatory framework for banks, other financial institutions
This follows moves by the West African Monetary Institute (WAMI), the body responsible for preparing the ground for the monetary union and currency for the subregion in two years , to create a common regulatory framework on banking for players in the sector.
The said regulations would border on all aspects of the financial sector, including those on prudential and capital adequacy requirements, and would be co-ordinated by WAMI, its Director-General (DG), Dr Abwaku Englama, told the Daily Graphic in Accra.
He explained that the initiative was part of a number of lessons the institute learnt from the ongoing financial crises in the Eurozone.
“We have learnt a lot from that crises and one thing we realised is that they (Eurozone members) didn’t have common banking laws and that was difficult for them to monitor the operations and performance of the banks in the zone. We want to correct that even before we start the union,” Dr Englama, who took office as WAMI’s DG in February this year, said.
He added that a draft report of the common regulatory framework for all banks in WAMI would be ready by the end of 2013 and once ratified by the member countries, the new laws would begin to apply to banks and other financial institutions in the zone.
“The idea is to make it such that what applies to banks in Ghana will also apply to banks in, say, Sierra Leone and other member states of the WAMZ,” Dr Englama said
He disclosed further that the institute was also in the process of initiating proposals for a deposit insurance scheme for banks in the member states, that, he explained was to ensure that in the event a bank in the subregion ran into difficulty, the insurance scheme could be used to cushion the depositors.
“All these are in preparation for the take-off of the union and the Eco,” Dr Englama, a Nigerian, noted.
He, however, called on the member countries to collaborate with the institute in making the integration a reality, explaining that its activities would amount to nothing if the decisions adopted were not ratified and domestiÎcated in their respective countries.
“We have a number of legal instruments that have not been ratified by the member countries and I think that is not good. This thing of a monetary union and common currency hinges on co-operation, it requires that they domesticate our instruments,” he said.
Source: Daily Graphic