Collaborate to achieve price, financial stability in the WAMZ …WAMI Director-General urges ECOWAS member states
Member states of the Economic Community of West African States (ECOWAS) must collaborate and tirelessly towards the collective goal of achieving price and financial stability for sustainable growth in the West African Monetary Zone (WAMZ), the Director-General of West African Monetary Institute (WAMI), Dr Olorunsola Olowofeso, has said.
“Persistent inflationary pressures, high interest rates, exchange rate volatilities, and public debt continue to pose downside risks to the post COVID-19 recovery of the global economy,” he stated
Speaking at the 46th Meeting of the College of Supervisors of the West African Monetary Zone (CSWAMZ) in Accra on Friday, the Director-General of WAMI said it was crucial for members of the WAMZ to identify potential downside risks to financial and price stability and proactively offer ways of mitigating such risks.
Persistent inflationary pressures, high interest rates, public debt and exchange rate volatilities, Dr Olowofeso stressed, presented a clarion call to strengthen compliance with the Basel Capital Requirements to ensure banks in the WAMZ had adequate capital buffers for their operations to ensure the safety and soundness of the financial system.
“Our discussions should focus on supervisory assessments of emerging risks, strengthening risk management systems and controls to ensure stable and sound financial systems in support of economic recovery in the WAMZ,” Dr Olowofeso told the delegates.
The Director-General of WAMI said there was the need to pay close attention to systemic banks in the Zone that might pose a threat to the safety and soundness of our financial systems due to interconnection and cross-border activities of financial institutions in the sub-region.
According to him, it had become necessary to harmonise cross-border supervisory and regulatory frameworks to address existing cross-border risks and spillovers arising from the increasing number of cross-border banks within the sub-region.
Dr Olowofeso said the 46th Meeting of the College of Supervisors of the West African Monetary Zone was very important as it gave the region the opportunity to review developments in the financial sector in the member states of ECOWAS and share experiences to address emerging risks to financial systems of the WAMZ.
The Director of Banking Supervision of the Central Bank of the Gambia, Madam Halima Singateh Jagne, who chaired the programme, said the World Bank’s June 2023 Global Outlook Report said the global economy continued to remain in a precarious situation from the overlapping shocks of the COVID-19 pandemic and the Russian-Ukraine war.
“The recent crises serve as a powerful reminder for policy makers and regulators in our region to strengthen risk management practices and policies by developing comprehensive risk management frameworks that improve measuring and liquidity risks, diversification of funding sources, outlining strategies and actions to address the liquidity crisis, reinforcing effectiveness of supervision by taking proactive actions in addressing and identifying vulnerabilities in advance,” she stated.
Madam Jagne said it was important for regulators to encourage commercial banks to enhance their transparency and disclosure practices and provide accurate timely information about their financial conditions and risk exposures and corporate governance to facilitate timely actions.
BY KINGSLEY ASARE
