Vice President Dr Mahamudu Bawumia Monday launched the Ghana Deposit Protection Corporation (GDPC) to support the development of a safe, sound and stable market-based financial system.
The establishment of the Corporation, he said, is an important step towards boosting the confidence of the Ghanaian depositors as part of efforts to consolidate the gains in the financial sector reforms undertaken by the Bank of Ghana (BoG) over the last two years.
The move, he said, was imperative in view of the 2008 global financial crisis that affected many economies worldwide, with its huge financial and social costs on depositors.
Therefore, he said, taking measures to protect the deposits of bank customers, either through the establishment of deposits insurance schemes or enhancing already existing schemes was critical for all stakeholders in the financial sector to promote financial stability.
Ghana established the Ghana Deposit Protection Scheme and enacted the Deposit Protection Act (Act 931) as the legal framework for protecting depositors' funds.
Vice President Bawumia said this when he launched the GDPC at the 2019 International Association of Deposit Insurers (IADI) Africa Regional Committee Technical Assistance Workshop in Accra.
The event, organised by the GDPC and the Central Bank, was held under the theme: "Deposit Protection: A Catalyst for Financial Stability".
It attracted deposit insurers, financial analysts, policy makers and the Diplomatic Community, to share ideas and network, in order to protect depositors from losing all their investments in the event of a Bank failure.
A seven-member Governing Board of the GDPC was introduced at the event and they would have an oversight responsibility over its management.
"Creating an enabling and stable financial environment is a pre-requisite for sustained economic growth. I am particularly grateful for the timing and opportunity given to Ghana to host the Regional Committee Technical Assistance Workshop," Dr Bawumia said.
The Vice President made reference to the country's own financial meltdown in recent years that resulted in the shutdown of 11 Universal Banks, 347 micro-financial institutions and 43 Fund Management Institutions by the BoG and the Securities and Exchange Commission.
He said government would continue to support the GDPC to grow to become an important safety net in the country's financial sector and entreated the Corporation to undertake intensive public education on its operations.
Dr Ernest Gyedu Addison, the Governor of the Central Bank, for his part, said the Bank, being a statutory institution, with the responsibility of formulating and implementing monetary policy, would continue with its mandate to ensure price stability, guarantee financial stability and promote economic growth.
The Central Bank, he said, would take keen interest in matters bordering on deposit insurance because it recognised the importance a deposit protection scheme could contribute towards the stability of the entire macroeconomic architecture of the country.
"This explains why the Central Banks are entrusted with the authority to regulate banks and specialized deposit-taking institutions in order to protect public savings, prevent build-ups of toxic assets which could have detrimental effects on the economy, prevent adverse consequences of bank failures with the ultimate goal of ensuring a health financial system," Dr Addison added.