Banking Sector

Traditionally, bank transfer in Europe in the 19th century was a very common phenomenon. It is mainly seen in emerging countries with lower levels. Kaminsky and Reinhard introduced a new concept called the double crisis in the banking industry. The concept of double crisis began in 1980 when the currency crisis and the banking crisis occurred at the same time. This harmful phenomenon marks a serious recession after the Fed runs the concept of deposit insurance in the United States in 1933.

Financial intermediation other than the usual banking system is a phenomenon that is unevenly distributed especially in developing countries where the banking industry is underdeveloped. In many cases, the size of the shadow banking department also reflects the complexity of the financial system and available financial instruments. For example, the United States is the largest shadow banking department so far (FSB 2014). However, given the loose regulation of existing investment products and weak regulation of financial intermediation, the rapid growth of Chinese shadow finance may pose a threat to financial stability.

Initially, Chinese regulators permitted the addition of shadow loans. After the financial crisis in 2008 when banks encouraged loans to stimulate consumption, the shadow banking industry began to grow. By the end of 2015, this sector grew faster than the conventional lending sector. According to Moody's report, in 2016 alone, the total assets of China's shadow banking sector increased by 20% to 64 trillion yuan ($ 9.8 trillion), which is equivalent to 86.5% of the gross domestic GDP. As the industry develops, problems begin to emerge. In January 2014, China Industrial Bank, one of the four state-owned commercial banks in China, informed the investor by 3 billion yuan ($ 496 million) WMP that it can not repay. According to the report, WMP investors promised 10% annual rate of return in three years, but this revenue failed when the recipient of Shanxi Tianfu Energy loan of North China Mining closed down.

Ghanas' banking industry has developed over the years. As of 2006, there were 23 major banks in the banking sector of Ghana (see Table 7). The banking industry in Ghana consists of 19 universal banks, 2 development banks, and 2 commercial banks, of which Apex Bank and 121 regional banks are included (www.bog.gov.gh). The introduction of universal banking in Ghana has changed the way banks operate in the economy dramatically. Unfortunately, not all banks operating in Ghana are eligible to become a universal bank. In order for a bank to qualify as a universal bank, we need at least $ 70 billion of shareholders' equity (www.agighana.org). According to the Universal Bank of Ghana Bank, it replaces the well-known three-pronged banking model, development, business, and commerce.