The Bank of Ghana (BoG) has proposed a new regulatory requirement compelling banks to hold sufficient high-quality liquid assets to cover projected net cash outflows over a 30-day period of financial stress.
The proposal, contained in the Liquidity Coverage Ratio (LCR) Directive, 2026, is an exposure draft published on October 9, 2026.
The proposal is open for public and industry comment until November 30, 2026, in line with the BoG’s Procedures for Issuance of Directives, 2020.
Key requirements indicate that banks must maintain an LCR of at least 100%, meaning eligible, unencumbered high-quality liquid assets must cover total net cash outflows projected over 30 calendar days under prescribed stress conditions.
The LCR is calculated by dividing a bank’s stock of eligible high-quality liquid assets by its total net cash outflows over the next 30 calendar days.
Qualifying assets must be convertible into cash quickly with little or no loss of value and free from restrictions during stress.
Eligible assets include cash, qualifying balances with the BoG, and eligible government securities. Other securities may qualify subject to conditions and regulatory haircuts.
Composition limits: Level 2 assets capped at 40% of the total high-quality liquid asset stock; Level 2B assets limited to 15%.
Banks must assess potential outflows from deposit withdrawals, reduced wholesale funding access, maturing financing obligations, and customers drawing on committed credit facilities, and banks must conduct their own liquidity stress tests, including scenarios more severe and longer than the 30-day supervisory minimum.
The measure aims to strengthen banks’ ability to withstand sudden funding pressures, meet obligations during market or institution-specific stress, absorb financial and economic shocks, and reduce the risk of individual bank liquidity problems spilling over into the wider economy.
Effective September 1, 2027, banks must align internal policies, processes, and systems by August 31, 2027.
A one-year pilot period follows publication, with quarterly reporting to the BoG using prescribed templates; monthly reporting is required after the pilot.
Stakeholders can submit comments via email to bsdletters@bog.gov.gh by November 30, 2026.
The BoG will consider all material comments and provide written explanations on how they were treated in the final directive.
The LCR requirement is part of the BoG’s broader regulatory framework for strengthening liquidity risk management, complementing the Liquidity Risk Management Directive, 2026, and the Liquidity Monitoring Tools Directive, 2026.
Implementation may require adjustments to treasury operations, asset allocation, liquidity forecasting, and regulatory reporting, depending on final provisions adopted after consultation.
