The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has revealed that the Ghana Financial Stability Fund (GFSF) has been initiated.

This announcement was made during a press briefing following a meeting of the Monetary Policy Committee.

"What maybe left now is the official launch by the Finance Ministry," he said.

The Ghana Financial Stability Fund has been established with the primary objective of mitigating potential impacts on financial institutions arising from the Domestic Debt Exchange Programme (DDEP). Additionally, a parallel strategy known as the Insurance Sector Strengthening Strategy (ISSS) is being developed, and the African Development Bank (AfDB) is expected to assist in its implementation by 2024.

To ensure effective governance of the Fund, the following measures are being implemented:

a. Investment Committee (IC): The Fund will be governed by a nine-member Investment Committee, with four independent experts recommended by industry associations and approved by the Ministry of Finance (MoF).

b. Development Partners (DPs): Development Partners may recommend observers to the committee, subject to the approval of the Minister for Finance. Other Development Partners may provide support to Fund A or B, with terms agreed upon with the Government of Ghana.

c. Regulatory Approval: The Bank of Ghana (BoG) and other relevant regulators will approve recapitalization plans, instruments, and criteria for their respective financial institutions. The Investment Committee will then make investment decisions based on these approvals regarding eligible financial institutions.

d. Solvency Fund A2 Secretariat: The Ghana Amalgamated Trust (GAT) will serve as the secretariat for Solvency Fund A2 and establish a ring-fenced operational framework for managing the Fund.

e. Fund A1 Project Unit: Fund A1 will have a project unit at the Ministry of Finance specifically for World Bank funded projects.

The Bank of Ghana Governor, Dr Ernest Addison is optimistic the fund will help the country's economic recovery drive.