The Bank of Ghana (BoG) is accelerating efforts to strengthen the legal and operational foundations of the country’s financial markets, using a specialised training programme to drive wider adoption of globally recognised repo and derivatives documentation frameworks among local financial institutions.
First Deputy Governor Dr. Zakari Mumuni addressed the programme, organised in collaboration with Frontclear, which focused on the Global Master Repurchase Agreement (GMRA) and International Swaps and Derivatives Association (ISDA) documentation standards. He said the rapid evolution of Ghana’s financial markets must be matched by stronger legal certainty, tighter risk management, and improved coordination across institutions.
“The integrity of Ghana’s financial market cannot rest on informal conventions or ambiguous documentation,” Dr. Mumuni said. “It must rest on legally enforceable agreements, operationally sound processes and professionals who understand precisely what they have signed.”
The GMRA is the globally accepted legal framework governing repurchase agreements, or repos, which allow market participants to use securities as collateral for short-term borrowing. ISDA documentation provides the contractual architecture for over the counter (OTC) derivatives and hedging transactions. The BoG said broader adoption of both frameworks would improve legal enforceability, reduce counterparty risk, and deepen confidence in domestic fixed-income trading.
Dr. Mumuni described a functioning repo market as a critical pillar of any modern financial system, explaining that repos support short-term funding, liquidity management, efficient collateral use, and monetary policy transmission. He cautioned that those benefits could only be realised when market participants fully understood the operational risks and legal obligations embedded in each transaction.
The central bank has in recent years introduced repo market guidelines formally endorsing the GMRA as the domestic industry standard, expanding eligible counterparties and securities and promoting arrangements designed to reduce credit risk and improve market efficiency. That legal architecture received further reinforcement in August 2024 when the International Capital Market Association (ICMA) published a GMRA legal opinion on the enforceability of netting provisions under Ghanaian law. Analysts said the opinion could attract broader international participation in Ghana’s repo market by providing clearer assurances around collateral and settlement enforcement.
Dr. Mumuni also stressed the need for closer coordination between treasury, legal, risk, and operational functions within financial institutions, describing those departments as a tripod in which no leg could afford to be weak. He urged market participants to sharpen their approach to collateral management, operational readiness, legal enforceability, and counterparty risk as Ghana works to align its practices with international standards.
The BoG said it would continue engaging market stakeholders to strengthen infrastructure, deepen liquidity, and adapt global frameworks to Ghana’s domestic conditions as authorities work to rebuild investor confidence and improve interbank liquidity management within the broader financial sector recovery process.
