Collapse of Big Banks in Ghana:Lessons on Its Corporate Governance

Funding: National Natural Science Foundation of China (No. 71371087) Abstract The news that two indigenous banks, UT and Capital Bank have been taken over by GCB Bank has come as a shock to many Ghanaians, as just a year ago, Capital Bank was adjudged the Best Growing Bank, and Best Bank in Deposits & Savings at the15th Edition of Ghana Banking Awards while UT Bank was adjudged best bank in 2011 by the same institution. UT bank is one of Ghana’s most celebrated brands, after it evolved from a micro-finance company into a successful bank.The study reveals the weak compliance to common Corporate Governance practices within the two banks. Specifically, the two banks had small board size as compared to the standard size of the banking industry. Also, the boards did not have enough committees to discharge its operation. The independence of the boards was also impaired as in most of the directors are executives and the non-executive directors have a close relationship with the promoters and executives. Keywords: Corporate Governance, Collapse, Commercial Banks, Board of Directors DOI: 10.7176/RJFA/10-10-04 Publication date:May 31st 201

Seasonality of exchange rates in Ghana

The seasonality of Ghanaian economic activities such as agriculture, consumption, money supply among others which affect exchange rate gives the impression that, the Cedi US Dollar rate also follows a particular pattern within the year. Using quarterly interbank Exchange rate data from 2000 to 2014, sourced from Bank of Ghana, this study has established the quarterly behaviour of the Cedi against the US Dollar. To achieve this, both statistical analysis and econometric model including trend, F Test, K Test and regression were computed with the aid of X-12 Census ARIMA program provided by the US Census Bureau. Whiles the trend analysis suggest seasonal depreciation of the Cedi with peak in the fourth quarter, the regression results indicates statistically insignificant average mean difference between the quarters. However, the moving seasonality test showed a cyclical pattern of seasonal frequencies evolving from year to year. The general conclusion we established from the study is that depreciation of the Ghana cedi to the dollar follows a moving seasonality with a pattern constantly repeated year to yea