‘Negative balance sheet by a Central bank is not unusual’ – John Kumah
A Deputy Minister for Finance, John Kumah, has stated that recording a negative balance sheet is not exclusive to the Bank of Ghana alone.
According to him, most Central Banks experience negative balance sheets in order to achieve the intended results.
In response to claims that the losses recorded by the Bank of Ghana indicate a collapse of the Bank and mismanagement of the affairs of the Bank.
“It is important to further highlight that a negative balance sheet by a Central Bank is not unusual, in fact, most Central Banks around the world run negative balances to achieve the overall economic anchor objectives of a Central Bank.
“History clearly illustrates this. Several central banks had negative equity yet fully met their objectives – for example, the central banks of Chile, Czechia, Israel and Mexico experienced years of negative capital. But throughout, financial and price stability were maintained.” – Bank For International Settlements Bulletin No.68,” parts of the statement sighted by GhanaWeb stated.
He also added that “According to Nordstrom and Vredin (2022), a central bank’s credibility depends on its ability to achieve its mandates. Losses do not jeopardize that ability and are sometimes the price to pay for achieving its aims.”
John Kumah further called on Ghanaians to ignore any claims concerning the Bank of Ghana while adding that “BoG is solid”.
“Such propaganda and unnecessary attacks at the central bank only result in increased market volatility, panic selling of assets, and can trigger a chain of events that can affect our overall economic stability,” he said.
SSD/DA
Source: www.ghanaweb.com
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