New Era Africa has petitioned Parliament’s Finance Committee on the current banking crisis in the country.
The group believes the crisis has shattered public confidence in the banking sector and does not only want a probe but one that is done publicly.
Below is a copy of the petition:
Finance Committee of Parliament
Parliament House, Accra
Dear Hon. Mark Assibey-Yeboah,
PETITION TO THE FINANCE COMMITTEE OF PARLIAMENT CALLING ON IT TO DO ITS INQUIRY INTO THE BANKING CRISIS THROUGH PUBLIC HEARING
On behalf of New Era Africa (NERA), I write to petition your committee to reconsider your decision to hold in-camera hearings on the recent banking crisis. It will be recalled that on the 13th of August, we (NERA) petitioned the Speaker of Parliament calling for a bi-partisan public hearing on the said crisis. To a large extent, your Committee’s intended inquiry into the matter fulfills part of this request and we applaud Parliament’s responsiveness on this particular matter. However, to achieve the necessary impact, there is the need to make the hearings public. Kindly find below our reasons:
1. Reports attributed to members (Chairperson and the Ranking Member) of the Finance Committee of Parliament have it that the reason for the intended in-camera hearing is to prevent damage to the banking sector because “money does not like noise”. NERA agrees (in part) with this dictum but believes this argument is flawed and highly misplaced in this context. It is the considered view of NERA that inasmuch as money hates noise, it most certainly does not move into places where doubts, apprehension, uncertainty, secrecy and mistrust thrive.
2. Following from the point above, it is instructive to note that in understanding cases of banking or financial crises across the world, enquiries into these matters have usually been public. An example would be the holding of nineteen (19) public hearings by the Financial Crisis Inquiry Commission after the 2008 financial crisis in the US. They subsequently made their findings public and till date, materials from their public enquiry can be found on their website www.fcic.gov. Also, in the UK, the House of Commons Treasury Committee’s enquiry into the banking crisis in the country in 2008-2009 held numerous public hearings and issued a three-volume report, which has been made public since the investigations were concluded. Similarly, in 2012, the Independent Joint Anti-Corruption Monitoring and Evaluation Committee investigated the collapse of the Kabul Bank which became a matter of public interest after many Afghans lost their deposits due to the crisis. The Committee’s investigations involved public hearings. The well-known Wells Fargo case of cross-selling warranted a public Senate hearing. In this particular case, the amount involved was nowhere near what the public may be losing in the case of Ghana. Other public inquiries have been held in other parts of the world when similar banking or financial crises rocked them.
3. In all of the cases cited in the preceding point, restoring public trust and confidence was the central motivation for public hearings. It therefore, goes without saying that such public hearings have been held to be an effective means of restoring public trust after major financial or banking crisis. This obviously shoots down the “money does not like noise” assertion cited by the Finance Committee as its reason for intending to hold ‘in-camera’ hearings.
4. Again, in many of the cases around the world where public hearings were held, industry sensitivity to public sentiment is much greater in those countries than in Ghana. And if it was thought in all those cases that public hearings were necessary to rebuild confidence, we believe there is no reason why Ghana should hold in-camera hearings on a largely similar crisis.
5. Furthermore, it is a fact that after the Bank of Ghana announced GCB Bank’s take-over of good assets of UT Bank and Capital Bank, the Finance Committee met with the Governor. Till date, the public (depositors and most importantly those who bought UT Bank’s shares through the Stock Exchange) do not know what actually happened. The Finance Committee has held everything to its chest. There is no document from the Committee that gives an account of what really led to the collapse of these two (2) banks. The current situation where snippets of information leaked from the various reports are thrown into the media landscape and dominate media discussions on the crisis has clearly not yielded any meaningful result, and we find it troubling that the Finance Committee will adopt this same approach.
6. The contagion effect associated with this banking crisis requires that the public actively follows proceedings to gain first-hand information about what really happened. Most business subsidiaries, which have relationships with the collapsed banks are now suffering because of the crisis. Last week, Prince Kofi Amoabeng, formerly of UT Bank painfully lamented the effects on his other businesses. A cursory look at the activities of other companies with even remote connections to these defunct banks reveals a much wider crisis beyond the banking sector. The survival of most businesses and thousands of jobs, therefore, depend on a restoration of positive public sentiment, which can only be achieved through public hearings.
7. We strongly argue that conducting this enquiry in public will be strict adherence to the rule of natural justice. There have been reports (commissioned by Bank of Ghana) that indict key officials and shareholders associated with these defunct banks. These damaging revelations have aroused public anger against those individuals cited. A critical observation from both the traditional and social media indicates that some individuals have received a barrage of attacks from the public. We believe a public hearing will give these individuals the finest opportunity to make their cases to either assuage the public anger or reinforce same.
8. We also fear the possibility of misreporting associated with in-camera hearings. Looking at the sensitive nature of this issue, holding an in-camera hearing will leave the media houses to speculate as they have usually done. This will go a long way to worsen the already marred public confidence.
9. Public funds used to bail out the banks means the matter is of great public interest. As noted above, so far, public funds spent or earmarked to mitigate the effects of the crisis is GHC 10 billion. As representatives of the people, with supervisory roles over the public purse, it is only fair and proper that Members of Parliament investigate the real issues leading to the crisis and on that basis collaborate with State Agencies to take both corrective and preventive steps to bring things to normalcy. A public enquiry will send positive signals about transparency in governance, especially as regards the people’s money.
10. This huge amount could equally have been channeled into other ventures or policies that directly benefit the good people of Ghana. Reports indicate that with a population of 29 million, Ghana has only 55 ambulances putting the ambulance – citizen ratio at 1 ambulance to 527,272 citizens. GHC 8.41 billion could have procured 16, 820, which would have improved the ratio to 1 ambulance to 1,718 citizens and remarkably changed emergency response in the health sector. If the people are missing this, they should at least know that something is going to be done about the mess and should be able to follow the process from start to finish.
11. An in-camera hearing will somewhat give credence to the perception that there exist the ‘different strokes for different people’ syndrome in Ghana i.e. crimes committed by upper-class citizens are handled differently from those committed by lower class citizens. There are currently ongoing media discussions alleging Members of Parliament are friends and classmates of the people involved in this banking crisis and that an in-camera hearing is orchestrated to shield the culprits because some Members of Parliament are financially exposed to these defunct banks. This perception is injurious to the rule of law, which has been established in Ghana.
It is clear that we all agree on one thing; that public confidence and trust in the banking sector have been shattered owing to the recent banking crisis. At the same time, the Ghanaian public and the Finance Committee want the restoration of confidence and trust. Every possible analysis of the facts and precedents points to the conclusion that only a public hearing can bring us this effect. For this reason, we petition your office to reconsider your decision to hold in-camera hearings on the banking crisis.