Ethical banking and resilience key to financial stability – Dr. Ernest Addison

The Governor of the Bank of Ghana, Dr. Ernest Addison, has called for a collective commitment to ethical principles and resilience in the financial sector, emphasising the need for strategic responses to emerging challenges.

Speaking at the 28th National Banking and Ethics Conference organised by the Chartered Institute of Bankers (CIB) Ghana in Accra on November 21, 2024, Dr. Addison congratulated the Institute’s leadership for its efforts in equipping banking professionals with the skills and knowledge to enhance sector resilience.

He lauded the introduction of new certification programs, including the Ethics Certification developed in collaboration with the Bank of Ghana, which he described as critical to advancing professionalism and ethical standards.

“At the Bank of Ghana, we believe that ethical certification should not be optional but a standard across the industry,” Dr. Addison remarked.

He encouraged banks to ensure that their staff actively enrol in the program, adding that ethical training empowers practitioners to make the right decisions even in complex situations.

Dr. Addison highlighted the conference’s theme, Resilience in the Financial System: Navigating Horizon Risks, as timely, noting that interconnectedness exposes the domestic economy to external threats.

He identified key horizon risks such as technological disruptions, climate-related vulnerabilities, and economic shifts, which require strategic foresight and proactive regulation. “The strategy toward addressing such horizon risks is multi-dimensional,” he said, citing the Bank’s regulatory reforms in areas like risk management, sustainable banking principles, and cybersecurity frameworks.

On digital transformation, the Governor acknowledged the opportunities presented by financial technology but warned of associated risks, including cyber threats and data privacy concerns.

He revealed that the Bank recently launched the Financial Industry Command Security Operations Centre (FISOC) to bolster cybersecurity resilience.

Addressing climate risks, Dr. Addison stressed that extreme weather events could directly impact financial stability, citing the destruction of infrastructure and farmlands as examples. “The Bank has prioritised climate and sustainability-related issues, promoting sustainable banking principles and supporting green investments,” he said.

He added that collaboration with global bodies to adopt best practices in Environmental, Social, and Governance (ESG) frameworks was ongoing to align with international standards.

Dr. Addison also emphasized the importance of stress testing and business model analysis in enhancing financial stability. “We have enhanced our stress-testing framework to evaluate banks’ resilience under adverse conditions,” he noted, adding that business model analysis would enable supervisors to identify vulnerabilities early.

He announced the upcoming adoption of a methodology for assessing the viability of banks’ business models, which he described as a proactive step toward safeguarding the sector.

Dr. Addison reiterated the centrality of ethical conduct in building a resilient financial system. “Integrity and professionalism are indispensable pillars of trust,” he said, expressing hope that ethical certification would become a badge of honour for all banking professionals.

He called for collective responsibility among regulators, financial institutions, and professional bodies to anticipate and navigate risks, ensuring that the financial system remains a pillar of strength for Ghana’s economy.