Economist Professor John Gatsi is pushing for the injection and restoration of liquidity into the banking and financial sector in order to realize the impact of the banking sector reforms embarked upon by government.
According to him, the core purpose of banking sector reform is not about reducing the number of banks from 33 to 23. The main purpose is to ensure solid, sound and stable banking sector that can deliver sustainable financial services to households, private sector and government while ensuring confidence within the framework of good corporate governance.
He said there is massive illiquidity because illiquid bonds were issued to support the process. This has made Consolidated Bank not meeting the demands of depositors.
Professor Gatsi noted that Meeting the minimum capital is not the same as liquidity of banks. The business is potent when liquidity is solid and the health of an economy is driven largely by liquid banking sector.
‘’Some banks met the requirements through mere booking transactions, the work is about ensuring a kind of corporate governance that does not undermine banking services. The work ahead is about ensuring banking sector liquidity. Without liquidity economic activities are still at risk’’ he added.