Financial Stability Council To Monitor Debt Exchange Programme

Dr. Ernest Addison, Chairman, FSC


THE FINANCIAL Stability Council (FSC) established by the Bank of Ghana has pledged to continuously monitor the impacts of Government’s debt exchange programme on financial institutions as well as the financial system.

In a statement issued recently, the Financial Stability Council said it would review measures to ensure the effectiveness and stability of Ghana’s financial system.

The Financial Stability Council was established in December 2018 by Executive Instrument to identify and evaluate the threats, vulnerabilities, and risks to the stability of the financial sector. The Council is chaired by the Governor of the Bank of Ghana,

It noted that “In keeping with its mandate, the Financial Stability Council will continue to closely monitor the impacts of the Debt Exchange on financial institutions and on the financial system as a whole, as well as the effectiveness of the measures outlined above. These measures will be reviewed continuously and recalibrated as needed to ensure maximum effectiveness to safeguard the stability of our financial system and the protection of deposits, pensions, policy holders’ funds, and investor funds/assets.”

On 5th December, 2022, the Government of Ghana launched Ghana’s Domestic Debt Exchange programme, an invitation for the voluntary exchange of approximately GHS137 billion of the domestic notes and bonds of the Republic, including E.S.L.A. and Daakye bonds, for a package of New Bonds to be issued by the Republic.

“The GSFS will provide liquidity to financial institutions that participate fully in the Debt Exchange. All financial institutions (banks, SDIs, pension schemes, collective investment schemes, fund managers, broker/dealers, insurance firms) that fully participate in the Debt Exchange can access the GFSF for augmented liquidity support, with effect from the date of completion of the Debt Exchange.

“To help manage the potential impacts of the Debt Exchange on the financial sector, financial sector regulators will deploy all regulatory and supervisory tools to mitigate risks to financial stability. Regulators will assess impacts on a regular basis, and quickly address evolving risks in order to safeguard financial stability,” the statement said.

BY Ebenezer K. Amponsah