Accra, July 17, GNA - The achievement of the macroeconomic convergence criteria for a single currency in West Africa must be complemented by a healthy and functioning banking and financial system, Mr Joseph B. Clottey, Head of Bank of Ghana's (BOG) Banking Supervision, said on Thursday.

He said a well functioning banking and financial system was crucial since it would guarantee transmission of monetary policy impulses and operations of payments systems in addition to the mobilization of domestic and external resources towards growth objectives in the West African Monetary Zone (WAMZ).

Mr Clottey, who represented the Governor of the Bank of Ghana, was addressing a workshop in Accra on banking Supervision in the WAMZ and a Future West African Financial Supervisory Authority (WAFSA). He said financial stability was a worthy goal if banks and other financial intermediaries played their expected roles in the monetary zone, adding that, financial stability was paramount in promoting monetary stability in member countries and would enhance regional trade and production activities.

The workshop is discussing the findings of a report that embodies financial systems and supervisory frameworks in place in all member countries and the extent of compliance with the Basel Core Principles of banking supervision. It is being attended by Ghana, Nigeria, Sierra Leone, The Gambia, and Guinea.

Mr Clottey said the planned integration posed several challenges for the banking and financial system, adding, "the number and variety of financial intermediaries ... differences in the supervisory framework and practices require a re-appraisal to ensure harmonisation." He said, even though, member countries had complied with most of the core principles and issues relating to information sharing; dealing with market and prevention of money laundering must be addressed quickly.

On the challenge of combining one large financial system with three small ones, Mr Clottey said: "It is my hope that no one country would be disadvantaged or made to relax its supervisory regulations towards efforts at harmonising existing systems."

He called for a discussion on the establishment of WAFSA indicating that, participants must tap from experiences in the European Union, Eastern Caribbean Central Bank and the Banking Commission of the West African Economic and Monetary Union.

Mr O. Ojo, Director-General of the West African Monetary Institute, said that the report would help strengthen and reposition the financial sectors in the WAMZ along the lines of international best practices in monetary unions.

He said the disposition of member countries towards the study would determine the extent to which the objectives could be attained and urged participants to decide on an action plan for implementation.