The Bank of Ghana (BoG) has cautioned that weak legal documentation and inadequate risk management practices could threaten confidence in the country’s expanding financial markets if urgent reforms are not implemented.
First Deputy Governor, Dr. Zakari Mumuni, noted that Ghana’s financial sector can no longer depend on informal arrangements as market transactions grow increasingly complex and sophisticated.
He made the remarks at the BoG/Frontclear Market Training Workshop on Repo Guidelines, Global Master Repurchase Agreement (GMRA), and ISDA documentation held in Accra, where he stressed that legal certainty and strong operational discipline are essential for financial stability.
According to him, “The integrity of Ghana’s financial markets cannot rest on informal conventions or ambiguous documentation. It must rest on legally enforceable agreements, operationally sound processes, and professionals who understand precisely what they have signed.”
The workshop brought together participants from commercial banks, treasury units, legal and risk departments, the Ghana Fixed Income Market, the Central Securities Depository, and the Ghana Securities Industry Association to strengthen capacity in global financial market standards.
Dr. Mumuni explained that as Ghana’s fixed-income market continues to expand and attract more complex financial instruments, institutions must match this growth with stronger internal controls, legal frameworks, and risk management culture.
“Growth at this pace must be matched by a corresponding investment in market infrastructure, legal literacy, and risk culture,” he warned.
He further noted that repo markets now play a critical role in liquidity management and monetary policy implementation, adding that their effectiveness depends on institutions fully understanding their obligations and counterparty risks.
He explained that the Global Master Repurchase Agreement (GMRA) provides a legal foundation for repo transactions by clearly defining default procedures, margin requirements, and counterparty responsibilities, thereby reducing legal uncertainty.
Dr. Mumuni also pointed to the importance of ISDA documentation in derivatives trading, describing it as essential for managing payment obligations, collateral arrangements, and default events effectively.
He called for stronger coordination between treasury, legal, risk management, operations, and senior management teams within financial institutions to ensure sound decision-making.
“A sound financial transaction demands strong coordination across the front office, risk management, legal, operations, and senior management,” he stressed.
He encouraged stakeholders to engage more deeply on issues such as collateral management, close-out netting, and operational readiness in order to strengthen resilience within Ghana’s financial markets.
The Bank of Ghana says it will continue collaborating with industry players and international partners, including Frontclear, to deepen market liquidity and reinforce confidence in the country’s financial system.