Causes of Bank Failure in Ghana a Study of UT and Capital Bank
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Abstract
Since the late 1970s, bank failures have become increasingly common the world over, to which Ghana was no different. The Bank of Ghana announced that Capital Bank (Gh) Ltd and UT Bank had been awarded receivership to Ghana Commercial Bank Ltd, because they were deeply insolvent. The study seeks to examine the general causes of bank failures in Ghana. The study adopted the deductive and inductive research approaches as it combined quantitative and qualitative strategies. The sources of data were from both secondary and primary sources. The Statistical Package for Social Science (SPSS v 23) was used to analysis the data. The findings of general causes of banks in Ghana from the the customers, capital requirements; poor risk management procedures such as lending practices of banks; lender of last resort, bad loans, deregulation of banks were the most severe causes of bank failures. The findings from the management members, lender of last resort; over-reliance on one member of staff, deregulation of banks; poor risk management procedures such as lending practices of banks; government Deposit insurance scheme were the most severe causes of bank failures. The findings from the regulators, political interference; inappropriate corporate government structures; bad loans; adverse economic environment; Fraud and corruption were the most severe causes of bank failures.
Keywords
Bank Failure
References
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