A Professor of Financial Economics at the University of Ghana Business School has questioned the collapse of UniBank, saying the fundamental principles of banking were disregarded during the financial sector clean-up.
Professor Lord Mensah, speaking on JoyNews' PM Express on Wednesday, July 30, insisted that the decisions taken at the time did not reflect sound banking practice. "In banking, there's what we call minimising the loss and then maximising the recovery.
And for me, this is a principle that's a baseline for banking activities, be it at the central bank level or the lower bank level," he said. "So for me, these principles were not applied…when we had the banking crisis." He cited the widely accepted notion of "too big to fail" and explained that banks don't exist in isolation. "The existence of a bank takes several dimensions… You're looking at government interest in there.
You're looking at employees' interest.
