Ghana becomes the 4th African country whose central bank has joined the Basel Consultative Group (BCG). The Bank of Ghana announced this in a press release as it expressed its delight to be a member of the prestigious group. The rest of the three other African countries who are members of the BCG include Tunisia, Mauritius, and Nigeria.
Meanwhile, the BOG explained that the BCG is one of five working groups that form the internal structure of the Basel Committee for Banking Supervision (BCBS). The BCBS is the global standards-setting body for the supervision of banks.
Above all, the BOG indicated that membership of the BCBS is limited to G20 countries. As such the BCG provides a platform for the BCBS to engage with non-members. This will help facilitate broader dialogue around the work with banking supervisory authorities such as the Bank of Ghana. As a result, it will promote supervisory cooperation and implementation of supervisory standards and best practices.
More importantly, the BOG’s membership of the BCG will increase the exposure of its banking supervisory staff to best practices. More especially in the supervision of banks. It will also strengthen its cooperation with other supervisory authorities around the world.
Meanwhile, the Bank of Ghana has reassured players of the banking industry of its commitment to promoting the safety and soundness of the sector. The bank promised to ensure effective regulation and supervision.
Roles of the Basel Committee on Banking Supervision (BCBS)
The Basel Committee on Banking Supervision (BCBS) is the primary global standard setter for the prudential regulation of banks. It provides a forum for regular cooperation on banking supervisory matters. Its members comprise central banks and bank supervisors around the world.
On the other hand, the BCG provides a forum for deepening the Committee’s engagement with supervisors on banking supervisory issues. It facilitates broad supervisory dialogue with non-member countries on new Committee initiatives. Early in the process, the committee gathers senior representatives from various countries, and international institutions. It also involves regional groups of banking supervisors that are not members of the Committee.
Meanwhile, on March 31, the Basel Committee issued principles for operational resilience and risk. These principles aim to increase banks’ capacity to withstand disruptions due to potentially severe events. The committee noted that COVID-19 has made operational resilience and mitigating operational risk even more important.
The BCBC urged Banks to develop and implement response and recovery plans to manage incidents that could disrupt the delivery of critical operations. These are operations in line with the bank’s risk appetite and tolerance for disruption. They also called on banks to continuously improve their incident response and recovery plans by incorporating the lessons learned from previous incidents.
Also, the principles outlined several cybersecurity strategies that banks must adopt in the recent era of the evolution of sophisticated technologies. The committee urged banks to ensure resilient ICT including cyber security that is subject to protection, detection, response and recovery programs. It added that banks should incorporate appropriate situational awareness and convey relevant timely information for risk management. Such information will also aid decision-making processes that fully support and facilitate the delivery of the bank’s critical operations.
