Economist and Finance Lecturer, Professor Godfred Bokpin has stated that banks operating in Ghana have rejected the original terms of the debt exchange programme.
According to him, the banks have made counter-proposal to government that analyses the impact of the proposed debt exchange on their balanced sheet.
Speaking on the Joy FM Super Morning Show, Professor Bokpin, said, the banks have indicated that even without debt restructuring, the mark-to-market policy is manifesting explicit losses on their books.
“The banks practically have rejected the original terms of the debt exchange. We are told that they have made a counter-proposal that analyses the impact of the proposed debt exchange on their balanced sheet. The banks have indicated that even without debt restructuring, mark-to-market of government financial instrument on their books is manifesting explicitly in losses”.
The banks according to the Central Securities Depository Monthly Bulletin hold chunk of government bonds to the tune of about ¢50 billion.
The University of Ghana Business School Associate Professor also said the 3% cut in the Capital Adequacy Ratio will not be enough to cushion the banks against shocks.
“We have seen and as we have indicated that the Bank of Ghana probably would cut 3% of the capital stabilization buffer essentially reducing the Capital Adequacy Ratio to 10% in order to accommodate them but that would still not been enough”.
“So there is already a push back from the bank, while it is good news to organised labour what happened yesterday [December 22, 2022], it makes the road a little harder for government in our journey to restore debt sustainability”.
Continuing, Professor Bokpin said the three years to restore debt sustainability is not enough because of the financial difficulties the country faces.
“So what It means is that debt sustainability is actually beyond an IMF programme now because we are told that the IMF programme is a three-year extended credit facility. Assuming it kicks in 2023, it would end in 2026 practically”.
Latest Stories
-
I want to focus more on my education – Chidimma Adetshina quits pageantry
3 hours -
Priest replaced after Sabrina Carpenter shoots music video in his church
3 hours -
Duct-taped banana artwork sells for $6.2m in NYC
3 hours -
Arrest warrants issued for Netanyahu, Gallant and Hamas commander over alleged war crimes
3 hours -
Actors Jonathan Majors and Meagan Good are engaged
3 hours -
Expired rice saga: A ‘best before date’ can be extended – Food and Agriculture Engineer
4 hours -
Why I rejected Range Rover gift from a man – Tiwa Savage
4 hours -
KNUST Engineering College honours Telecel Ghana CEO at Alumni Excellence Awards
4 hours -
Postecoglou backs Bentancur appeal after ‘mistake’
4 hours -
#Manifesto debate: NDC to enact and pass National Climate Law – Prof Klutse
4 hours -
‘Everything a manager could wish for’ – Guardiola signs new deal
5 hours -
TEWU suspends strike after NLC directive, urges swift resolution of grievances
5 hours -
Netflix debuts Grain Media’s explosive film
5 hours -
‘Expired’ rice scandal: FDA is complicit; top officials must be fired – Ablakwa
6 hours -
#TheManifestoDebate: We’ll provide potable water, expand water distribution network – NDC
6 hours