BOG, others consult on Reporting Standards

Accra, April 24, GNA - The Bank of Ghana (BOG) is in consultation with the Institute of Chartered Accountants and the various banks to determine which aspects of the International Financial Reporting Standards (IFRS) to implement to suit local conditions. The IFRS presents a uniform basis for recognition, classification and measurement of financial assets and liabilities and the related income and expenditure of financial institutions.

Speaking at a regional seminar on Risk-Based Banking Supervision, Mr Van Lare Dosoo, Deputy Governor of the Bank of Ghana, who announced this said the move, was part of efforts being made to ensure adequate supervision of banks to ensure the financial health of the economy. He said in view of the globalisation and consolidation of the financial system, stability of the financial system had become the central challenge to bank regulators and supervisors throughout the world.

Mr Dosoo said with the new developments in the banking sector and the understanding that effects of crisis could spread given the linkages and interdependence of banks called for a new approach to ensuring the financial health of the economies of various countries. He said the shift in focus of regulation and supervision would demand a change in management strategies in both the supervisory authorities and the banks.

"In particular, the effectiveness of the risk based supervision would invariably depend on the bank's preparedness in certain critical areas, such as quality and reliability of data, soundness of systems and technology among other things."

Mr Dosoo said the banks would need to re-orient its organisational set up to put in place efficient risk management architecture, risk focused internal audit, strengthening of the management information system and set up compliance units.

"A successful transition to risk based supervision cannot do without the above and obviously make them imperative," he said. Mr Dosoo called for the implementation of the change to risk-based supervision throughout the West Africa Sub-Region to avoid contagion due to the current trend of financial integration within the Sub-Region. This requires member countries to re-engineer their supervisory frameworks to conform to international best practices. He expressed satisfaction with steps being taken by countries in the Sub-Region to adopt relevant aspects of the core principles of information sharing and risk management.