The current financial sector rumpus has seen directors, CEOs and top-level officials of some commercial banks whose activities contributed to the collapse of indigenous banks face a barrage of criticism – and rightly so, because as experienced as they are in financial issues they should have seen it coming.
Some experts are calling for punitive measures to be applied to send a strong signal to bankers that they have to play by the rules. However, we seem to have overlooked the role of both internal and external auditors whose duty it is to identify financial mis-statements, among other functions.
If indeed these entities collapsed because of bad financial practices, then auditors in the country who are tasked with reviewing their books should be equally found guilty for not providing true and fair opinions on the financial status of the collapsed financial institutions.
Auditors can be legally liable for actions that represent a failure to perform professional services adequately. In other jurisdictions, judges have ruled against auditors who failed in their responsibility to prevent fraud.
Hence, while it is in order for financial experts to call for the heads of all whose actions and inactions contributed to the collapse of these five banks, we fail to see how auditors cannot be held equally liable for the financial damage wrought.
It is pleasing to observe that the regulator is making strenuous efforts to sanitise the industry and ensure integrity is restored, because confidence is a key ingredient for ensuring a thriving banking sector.
In order to protect depositors’ savings, the BoG has had to recapitalise the new bank to the tune of GH¢450million and issue a bond of up to GH¢5.76billion as assets. This prompt action by the BoG has not witnessed the panic withdrawals that usually accompany such liquidations. We are happy everything was done in an organised and smooth manner.
It is now up to the regulator to be abreast with happenings within the sector to ensure a vibrant industry that impacts so much on macroeconomic stability.