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“Collapsing of financial institutions is travesty of justice- NDC MPs’ claim

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The National Democratic Congress, (NDC), Members of Parliament (MPs’) have described the collapsed of some banks and savings, and loan companies as travesty of justice.

According to them, these financial entreprises that have been collapsed by The Central Bank were in good-standing until The Bank of Ghana, (BoG), through its bad policies which has led to panic withdrawals.

Addressing the parliamentary press corps in Accra on recent developments  in the banking and financial Sector,  the MP for Bolgatanga Central and a Member of Finance Committee of Parliament, Isaac Adongo stated that “the collapse of the 23 savings and loans companies was a travesty of justice”.

According to him, “these savings and loans companies were strong by the end of 2016 and have suffered from acute panic withdrawals and systemic impact of the banking sector mess created by BOG”.

According to him, it was the improper handling of the interconnectedness of these banks to the rest of the financial systems that has resulted in a meIt-down of the financial sector.

“On the “Too big to fail” theory, although the jury is still out there regarding the pros and cons, the fallouts from the liquidation of Unibank for example has shown that the cost of liquidation has greatly outweighed the cost of  simply repaying the bank what it was owed by government and doing so promptly”, he stressed.

Mr. Adongo was of the view that, “clearly, it was not about facilitating a merger, providing credit, or injecting government capital, as would be the case in most ”Too big to fail” resolutions.

It was as simple as repaying the bank what it was owed, and we really don’t see the argument by the Vice President”.

He argued that given the high level of interconnectedness in the case of some of the collapsed banks, a more careful and patient resolution method should have been considered.

Story filed by Edzorna Francis Mensah

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