A financial analyst and CEO of Universal Capital Management Ltd, Dr. Richmond Akwasi Atuahene, has described as needless the array of regulatory bodies in the financial sector, arguing that, multiple regulators do not ensure and guarantee enough customer protection.

In an interview with the B&FT, Dr. Atuahene said the country needs to adopt what is called a “Twin Peak Model,” which will establish a prudential regulator mandated to maintain financial soundness and a separate market conduct regulator which will be responsible for both investor and customer protection.

“The danger in having institutions like banks, pensions, securities, and insurance, having different bodies in managing them is that it can create what we call financial arbitrages. What it means is that there are jobs being done by the banks and at the same time being done by Securities and Exchange Commission.

For example, last year, SIC boss went on her own way and issued a guarantee of millions of dollars which was even taken to court. The issue is that when the debt threat arises, money will have to be paid. And the money will only be paid by the Bank of Ghana. Meanwhile Bank of Ghana doesn’t control National Insurance Commission,” Dr. Atuahene said.

“So, if you allow one organisation to have a multiple regulator, there are always what we call financial arbitrages; people will hide behind somewhere and do certain things which, in the end, will impact on the central bank and the whole economy.

So, I am of the view that we have come that far that we need to look at our whole regulation to consolidate it into one thing. We should have only one financial regulator who will take care of all the institutions that I have mentioned,” he added.

The Ghanaian financial system comprises the central bank, universal banks, savings and loans companies, finance companies, micro- finance companies, credit unions, insurance companies, pension fund companies, asset management firms (mutual funds), financial brokerage firms and a stock exchange.

Dr. Atuahene said Ghana must imitate countries like the UK and South Africa that used to practice a multi financial regulatory system but changed to the Twin Peak Model to strengthen the sector.

“Unfortunately, in Ghana nobody is looking at business conduct regulation… We need to have an institution which will regulate all business conduct.

For instance, I bought shares in SIC when it was partially listed. And for those of us who have smaller shares they have never paid any dividends to us. Who is regulating them to tell them to pay dividend to these small shareholders?

South Africa, last year, decided to come out of the multiple regulatory system and begin to look at the two regulators I mentioned. If this is done here then what happened in the DKM case will not happen again,” he intimated.