Reforming Ghana's Financial Regulatory Architecture: A Case for the Twin Peaks Model of Regulation

Ghana's financial system encompasses four distinct sectors, with each sector having a separate regulator. The banking, insurance, capital markets and pensions sectors are regulated by the Bank of Ghana, National Insurance Commission, Securities and Exchange Commission and the National Pensions Regulatory Authority, respectively. Ghana's model of financial regulatory architecture, known as the silo or traditional model, therefore involves different regulators supervising different sectors based on the nature of the business conducted in these sectors. This model of financial regulatory architecture, however, presents challenges such as lack of coordination among regulators and sectoral arbitrage, among others. Additionally, the traditional model adopted by Ghana appears to be outmoded and in need of reform, consistent with the complexity of modern financial systems. This article therefore makes a case for Ghana to adopt the Twin Peaks approach to financial regulation, which is more likely to eliminate the challenges of the current model and lead to a more robust and sound financial system.