The power of the Bank of Ghana (BoG) to exercise its dual role of manning the country’s monetary policy and regulating financial services has come under threat in Parliament.

Some Members of Parliament last week called for the separation of these powers so that at least a new institution could be given the responsibility to oversee an aspect of the financial services.

Matthew Prempeh, MP for Manhyia, who supported Hackman Owusu-Agyemang, MP for New Juaben North, when the latter called for the establishment of a Financial Services Authority (FSA) as well as a Financial Ombudsman to curb the exploitation of Ghanaians by banks in the country, said: “Too much power has been concentrated in the Bank of Ghana.”

Hon Owusu-Agyemang explained that it would regulate the financial services market as well as exchanges by promoting efficient, orderly and fair financial markets while the Ombudsman’s main task would be to settle complaints.

Though BoG currently regulates the financial sector, the MP was optimistic that the FSA would make government the main regulator of the financial services industry when established.

“The FSA is normally established by government to set standards for operators in the financial sectors. It can also take action against firms that fail to meet the required standards.”

Hon Owusu-Agyemang further said the FSA would be established by an Act of Parliament to make it accountable to the public, industry and government.

He informed the House that the advocacy was in reference to President J. E.A Mills’ State of the Nation address in which he appealed to the parliamentarians to join in the management of the economy.

“Ghanaians and businesses are being shortchanged by the banks and other financial institutions,” he said.

On the inadequacies of the financial sector, he mentioned that the Central Bank lacked the authority to champion the interest of the ordinary businessman.

He therefore proposed the establishment of a regulatory mechanism that would enforce equity and fairness as well as a resolution mechanism to settle grievances.

Hon. Owusu Agyemang stated that BoG has no moral authority to play the role of a fair and unbiased regulator of the financial sector.

“Why is the prime rate set at 18.5 percent while the base rates of banks in the country are between 29 percent and 30 percent?” he asked.

He told the House that a letter had been sent to the Ministry of Finance and Economic Planning, requesting the establishment of the two bodies for the effective regulation of the country’s financial sector.

“There is an urgent need for an effective regulatory mechanism to give a voice to the voiceless,” he said.

Justice Joe Appiah, MP for Ablekuma North, also added his voice to the call, noting that the financial market in Ghana is not well-regulated. “Perhaps that is why more foreign banks are moving here.

The cost of doing business is very high as a result of the soaring lending rates and unemployment rate is expected to soon skyrocket. This would lead to the collapse of businesses.”

Anthony Osei Akoto, MP for Old Tafo and former Minister of State in charge of Finance and Economic Planning, hinted that the Ministry of Finance, under the previous government, drafted a bill that was modeled after the UK tradition.

“Liberalization of the system is not helping and there are many loop-holes that should be addressed,” he observed.

Haruna Iddrisu, Minister of Communication and MP for Tamale South, gave the assurance that the Minister of Finance and Economic Planning would collaborate with the Attorney-General to introduce a bill to establish the institutions.

By Emelia Ennin Abbey