BoG, other Central Banks in Africa cautioned on the collapse of Silicon Valley Bank

Anthony Sarpong, Senior Partner at KPMG Ghana has advised the Bank of Ghana (BoG) and other Central Banks in Africa to learn from the collapse of Silicon Valley Bank.

According to Mr. Sarpong, the U.S Bank’s collapse should serve as a warning to the banking industry to avert a similar situation in the future.

One of the ways to prevent the collapse of banks he said is to maintain adequate liquidity to meet customer withdrawals, he said.

Following the collapse of the US bank, Silicon Valley Bank and other bigger financial institutions, Mr. Sarpong in an interview, as a word of caution said the failure of those banks is a clarion call that must not be overlooked.

He however expressed confidence in the Central Bank being able to avert any of the potential risks faced by Silicon Valley.

Mr. Sarpong’s confidence in the Bank of Ghana stems from the measures taken by the central bank to support commercial banks in the ongoing debt restructuring programme.

“You noticed that the regulator has taken swift action to contain the effect of what is happening in the United States on the banking sector and any potential spill-over. So we won’t expect any effects.

“However, it’s a developing situation and therefore must be watched with caution so that the fear it triggered in the US does not have a negative impact on Ghanaian banks as we go through our own challenges” he said.

In addition, the Senior Partner at KPMG Ghana urged the Bank of Ghana to ensure sufficient liquidity in the banking industry.

“The main area is to ensure sufficient liquidity of the banks, and the Bank of Ghana has assured of liquidity support to our banks. So one will be sure that we won’t go through a similar situation as we go on with our own debt restructuring” he added.

On March 10, Silicon Valley Bank, one of the most prominent lenders in the start-up ecosystem, collapsed.

The Bank was a financial institution that provided banking services to nearly half of the United States (US) venture capital-backed technology and life-science companies.