Governance aqnd Advancement in Financial Institutions in Ghana

Abstract

This study examined the effect of governance on financial institutions in Ghana. This is because studies done so far on this topic have failed to elicit the unique features of the governance on financial institutions in Ghana into consideration. The study was guided by endowment and new institution theory. The study adopted Autoregressive Distributed Lag (ARDL) Bound testing cointegration by Pesaran, Shin and Smith (2001) technique. The findings of the study are as follows: there is no long run relationship between governance and domestic credit to private sector in Ghana, there is no long run relationship between governance and broad money in Ghana, there is short run relationship between governance and domestic credit to private sector in Ghana there is short run relationship between governance and broad money in Ghana. Guided by the findings obtained from the study, the following recommendations were put forward to the leader of Ghana should help enhance governance so that it would translate into a better financial institution. Governance policies should be directed into vibrant monitoring, capital assistant and training for the financial institutions in Ghana, in order to have sound financial institutions in Ghana.