Research Article

Effectiveness of Bank of Ghana’s regulation and supervision of banks in Ghana

^*1King A. Salami, PhD and ²Mary Larmie

¹Dean of the Faculty of Business Administration, Islamic University College, Ghana (IUCG), P O Box CT 3221, Accra, Ghana.

²Bank of Ghana, Accra, Ghana

*Corresponding Author Email: k.salami@yahoo.co.uk

Accepted 28 September , 2013

Abstract

Several crises have hit banks and financial institutions, the most widespread being the 2007/8 World Financial Crisis which has signaled the need for effective regulation and supervision of banks and the financial sector. This study seeks to investigate the impact of regulation and supervision of banks by the Bank of Ghana (BoG). The research largely uses survey method involving a cross-sectional study of selected commercial banks and customers, and selected officials of the Banking Supervision Department (BSD). The SPSS was employed in data processing and analysis. The study has revealed that BSD has the appropriate resources: adequate and knowledgeable staff and financial resources, and is well equipped to handle potential crises. But a critical challenge is the need to upgrade the outmoded off-site monitoring device (EFASS System) to enhance efficiency and effectiveness, and lack of appropriate IT resources, mostly software related, all calling for urgent attention.

Keywords: regulation and supervision; banking supervision department; Bank of Ghana; financial environment; commercial banks