Money and the Financial System in Ghana

Broadly speaking, a country’s financial system includes all institutions involved in moving savings from households and firms (whose income exceeds their expenditures) to other households and firms who like to spend more than their income and liquid assets. There are basically five parts of the financial system in Ghana. These include money, financial markets, financial market instruments, financial institutions and the central banks. This chapter explains, in the view of the economist what money is, the development of Ghana’s financial system since the colonial era, what financial markets are, as well as, the types of financial markets. This will be followed with the explanation of financial instruments, when these instruments are used, the financial institutions and their role in the financial system. Finally, the role of the bank of Ghana in ensuring efficiency in the financial markets will be discussed.