Author: Albert Mcbell Ninepence
Ashesi University College, Ghana
EXECUTIVE SUMMARY
This written piece seeks to independently advise the Government of Ghana on the planned access of international capital market. International capital market (ICM) involves residents of different countries trading in different assets. Mostly, governments take advantage of the international capital market to borrow for domestic investment projects. In this era, globalization of international capital markets and also the existence of large financial businesses have shown that crises that hit international capital markets can be transferred in the form of financial shocks to different countries. When capital markets are liberalized, stringent regulations and supervisions are required to be in place to shield the capital market from instability. The findings of this paper indicates that the current state of the international capital market is sound and there are benefits in line with accessing the international capital market as well as risks especially with the international bond market. Also, potential financial crisis the nation (Ghana) may be exposed to through the back-up of issuance of bonds in the international capital market include speculative investment behavior and potential economic instability, capital flights among other factors. An attempt by government to design systems and structures to prevent potential crisis is no longer an option but a necessity as the sound measures put in place will go a long way to enhance buoyant economic growth. The measure which government could employ includes prudent regulations and supervisions, maintaining strong macroeconomic fundamentals among other factors discussed in this paper. 3
Keyword: Capital Market, International Capital Market, Advice to Ghana Government
