“Persistent inflationary pressures, high interest rates, ex­change rate volatilities, and public debt continue to pose downside risks to the post COVID-19 recovery of the global economy,” he stated

Speaking at the 46th Meeting of the College of Supervisors of the West African Monetary Zone (CSWAMZ) in Accra on Friday, the Director-General of WAMI said it was crucial for members of the WAMZ to identify poten­tial downside risks to financial and price stability and proactively offer ways of mitigating such risks.

Persistent inflationary pres­sures, high interest rates, public debt and exchange rate volatili­ties, Dr Olowofeso stressed, pre­sented a clarion call to strengthen compliance with the Basel Capital Requirements to ensure banks in the WAMZ had adequate capital buffers for their operations to ensure the safety and soundness of the financial system.

“Our discussions should focus on supervisory assessments of emerging risks, strengthening risk management systems and controls to ensure stable and sound financial systems in sup­port of economic recovery in the WAMZ,” Dr Olowofeso told the delegates.

The Director-General of WAMI said there was the need to pay close attention to systemic banks in the Zone that might pose a threat to the safety and soundness of our financial sys­tems due to interconnection and cross-border activities of finan­cial institutions in the sub-region.

According to him, it had become necessary to harmonise cross-border supervisory and regulatory frameworks to address existing cross-border risks and spillovers arising from the in­creasing number of cross-border banks within the sub-region.

Dr Olowofeso said the 46th Meeting of the College of Super­visors of the West African Mon­etary Zone was very important as it gave the region the opportunity to review developments in the financial sector in the member states of ECOWAS and share experiences to address emerging risks to financial systems of the WAMZ.

The Director of Banking Supervision of the Central Bank of the Gambia, Madam Halima Singateh Jagne, who chaired the programme, said the World Bank’s June 2023 Global Outlook Report said the global economy continued to remain in a precarious situation from the overlapping shocks of the COVID-19 pandemic and the Russian-Ukraine war.

“The recent crises serve as a powerful reminder for policy makers and regulators in our region to strengthen risk man­agement practices and policies by developing comprehensive risk management frameworks that improve measuring and liquidity risks, diversification of funding sources, outlining strategies and actions to address the liquidity crisis, reinforcing effectiveness of supervision by taking proactive actions in addressing and identi­fying vulnerabilities in advance,” she stated.

Madam Jagne said it was im­portant for regulators to encour­age commercial banks to enhance their transparency and disclosure practices and provide accurate timely information about their financial conditions and risk exposures and corporate gover­nance to facilitate timely actions.