A Financial Economist and Senior Lecturer at the University of Ghana Business School (UGBS), Dr Lord Mensah,has said that in order to gain customers’ trust in the financial sector, individuals responsible for the the banking crisis must be punished.
He explained that until individuals responsible for the current banking crisis were shamed, the trust in the banking sector cannot be restored.
“As we speak now, we need to bring people on board to be named and shamed, put them in jail and I think that will serve as caution to others,” he added.
Speaking at the maiden edition of the Noble International Business School (NiBS) breakfast meeting on May 8 in Accra, Dr Mensah stated that the manner in which the current banking crisis was handled would have a ripple effect on future occurrences.
“To solve the banking sector crisis and to win the customers’ trust is about how to handle current situations. For me, before we can solve this problem, we need to look at how we handle the current happenings,” he said.
He added that until persons were made to face the law for such crimes, customers’ trust in the banking sector would be lost.
Dr Mensah underscored some primitive measures that can be put in place by regulators in their quest to rebuild trust in the banking sector.
He called for a banking Act for individuals in higher position and enforcement when necessary to serve as caution to others from engaging in activities that will affect the sector negatively.
He advised that the policies must be publicised to the general public, particularly through medium that will reach the informal sector to help build confidence in the informal sector.
“It is about time we let the public know that these are the levels of punishment for anyone in the sector who breaches the law, corporate governance must not remain in the lecture halls,” he said.
Lack of integrity
The President and Executive Dean of NiBS, Professor Kwaku Atuahene–Gima indicated that lack of integrity had steered mistrust in the financial sector.
He explained that the structures of the financial sectors did not depict honesty, and ,therefore, fostered some level of mistrust in the sector.
“For me, I think our banking structures have fostered some form of mistrust. Again, there are too many banks, microfinance and savings and loans companies , hence the need to find ways to reduce them,” he said.
Prof Gima stated that moral deficit on the part of citizens and regulators also resulted in the mistrust in the financial sector.
He advised that citizens to abide by truthfulness and called on the regulators to enforce laws and give appropriate sanctions for offenders to serve as a deterrent to others.
A Director at the Securities and Exchange Commission, Dr Benson Aidoo called for effectiveness on the part of regulators and the government.
He said regulators must be able to communicate effectively with their stakeholders including depositors and investors, and educate them on happenings in the sector to aid them in making informed decisions.
“As regulators, we must be able to communicate effectively with our customers and citizens to bridge the information deficit to guide them make informed decisions,” he said.
He added that the government must amend laws to suit industry demands because as the industry evolved there was the need to change laws to meet industry standards.