The actions of the Central Bank of Liberia if not curtailed could shake the foundations of Liberia’s financial sector.
This is in reference to a communication from Senator Amara M. Konneh of Gbarpolu County raising serious concerns regarding the Central Bank of Liberia’s (CBL) issuance of guarantees on liabilities during the purchase transactions of two commercial banks.
The guarantees, which were issued without the necessary legislative approval, have sparked demands for an immediate investigation.
In a formal communication addressed to planery, Senator Konneh outlined the troubling details of the situation.
The senator’s letter sheds light on the CBL’s decision to provide guarantees for non-performing loans, advances, and deposits taken over by Sapelle International Bank Liberia Limited (SIBLL) and Global Bank.
These actions, he asserts, were taken without adhering to the proper legislative protocols, which is a clear violation of the Constitution and laws of Liberia.
The core of the issue lies in the issuance of carte blanche guarantees by the CBL Board.
According to Senator Konneh, these guarantees were intended to cover losses at insolvent commercial banks, a move that requires thorough scrutiny.
“The CBL Board had no right to issue these guarantees without the proper involvement of the Legislature,” he stated.
Such guarantees should involve both the Executive and the Legislature, ensuring that due process is followed and that all actions are in line with constitutional mandates.
The senator emphasized that while the CBL plays a critical role in maintaining financial stability, it is not a charitable institution.
It is obviouse that the CBL’s primary responsibility is to uphold the country’s monetary policy, not to bail out commercial banks indiscriminately.
Senator Konneh highlighted that SIBLL has reportedly depleted its reserves with the CBL, and Bloom Bank has lost a court case, leading to significant financial demands.
Additionally, Bloom Bank is currently embroiled in several active lawsuits, further complicating the situation.
In his letter, Senator Konneh pointed out the urgency of the matter, noting that the tenure of several CBL Board members was ending imminently.
This, he warned, could hinder any efforts to address the issue effectively.
To ensure a thorough investigation, the Gbarpolu County Lawmaker called on the Senate to request the President to extend the terms of these Board members by two weeks.
“This 55th Senate needs to hold people accountable for their actions to ensure the integrity of our institutions, especially an institution as crucial as the CBL,” Konneh wrote.
The senator’s call for an investigation is rooted in a desire to maintain transparency and accountability within Liberia’s financial system.
He stressed that the issuance of guarantees without legislative approval undermines the rule of law and sets a dangerous precedent.
The integrity of the CBL, as the custodian of the nation’s monetary policy, must be preserved, and any actions taken outside the bounds of legal procedures must be scrutinized.
Senator Konneh’s letter has brought to light the complexities and potential ramifications of the CBL’s actions.
The financial stability of Liberia is at stake, and the senator’s appeal for a thorough investigation underscores the need for immediate and decisive action.
The involvement of the Legislature in such critical financial decisions is not just a legal requirement but a safeguard to ensure that all actions are in the best interest of the country and its citizens.
The outcome of this investigation will not only impact the current financial landscape but also set the tone for how similar issues will be handled in the future.
Senator Konneh’s call to action is a reminder of the critical role that the Legislature plays in overseeing and guiding the actions of financial institutions, ensuring that they operate within the framework of the law and in the best interests of the nation.
The coming investigation promises to be a defining moment for the CBL, the Senate, and the future of Liberia’s financial governance.
