Question

The recent collapse of some banks and financial institutions and the merger of others in ghana is proof that the financial system which consists of institutional units and markets that interact, typically in a complex manner, for the purpose of mobilizing funds for investment and providing facilities, including payment systems, for the financing of commercial activity remains unprotected in spite of the the presence of the Regulator and a solid legal system backing it. From the discussion in class and available literature, examine some of the difficulties associated with the financial system and how these challenges have been addressed by the Banks and Specialised Deposit Taking Institutions Act 2016 (Act 930). Are there any novel ways by which some of the challenges may be resolved in your opinion?

Answer 1

Banks enact a very significant financial intermediary part in any economy. This role is profoundly controlled from the beginning of the banking business, that is licensing, and frequently throughout the operations of the bank. The procedure of savings, finance and investment includes financial institutions, markets, instruments and services. Beyond everything, management control and regulation are just as substantial. Thus, financial management is an essential part of the financial system. On the basis of the experiential proof, Goldsmith said that a situation for the hypothesis that the parting of the tasks of savings and investment which is made promising by the introduction of financial instruments as well as expansion of the variety of financial assets which trails from the formation of financial institutions intensify the competence of investments and increase the ratio of capital creation to national production and financial accomplishments and through these two networks escalate the rate of growth.