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IPFS News Link • Economy - International

"Horror" In Ghana As A Third Of Banks Shutter, Sparking Unprecedented Bank Run

•, by Tyler Durden

One couple, two of some 70,000 investors who were impacted by the shuttering of some 23 savings and loan companies - about one-third of banks in the country - and a run on the country's asset managers, described to Bloomberg how they deposited money in a short-term investment product, intended to help save money for the wife to finish her economic Phd., only to discover they may never get the money.

The couple are among at least 70,000 investors who have become collateral damage from a cleanup of Ghana's banking industry. The crackdown, which reduced the number of lenders by a third and saw the closure of 23 savings and loans companies, also triggered a run on fund managers, who couldn't sell their holdings fast enough to meet demand.

That's tying up as much as 9 billion cedis ($1.6 billion) of investments, more than a third of the 25 billion cedis in assets that private fund managers oversee for retail and institutional investors.

"My wife was very disturbed," the 36-year-old said by phone from Kumasi in Ghana's Ashanti Region. They're not getting answers and are now worried they'll never get back the 12,000 cedis they expected back from their investment. "If I knew this would happen, I wouldn't have gone there."

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