By Dana Sanchez
Up to 70,000 people could be facing financial ruin after a massive government “cleanup” of Ghana’s banking system that reduced the number of lenders by a third, closed 23 savings-and-loans and triggered a run on banks which couldn’t sell their holdings fast enough to meet demand.
An estimated $1.6 billion has been wiped out. That’s more than 33 percent of the assets that private fund managers supervise for retail and institutional investors, Bloomberg reported. Ghana’s main financial regulator, its Securities and Exchange Commission, has increased pressure on at least 20 fund managers suspected of violating the rules.
Ghana’s SEC is blocking these money managers from accepting new investments, concerned they may use the funds to pay out existing investors.
“The government needs to step in to build confidence again,” said Lord Mensah, a senior finance lecturer at the University of Ghana, in a phone interview. “There’s nothing we can do apart from making sure that we create that necessary environment to regain investors’ confidence again.”
The chances are slim of the Ghanaian government bailing out burned investors, <a target="_blank" Click here to read entire article