Automation of Stock Exchanges

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CHAPTER TWO LITERATURE REVIEW
2. I History of the Formation and Operations of the Ghana Stock Exchange
The financial crises that the Ghanaian economy experienced by extending the banking sector in the early 1980’s made policymakers and the private sector to look for complementary sources of long-term capital so as to reduce the dominance that existed in the banking system. The government of Ghana in collaboration with the World Bank and International Monetary Fund (IMF) initiated Economic Recovery and Structure Adjustment Program in the mid 1980’s. A key component of the Economic Recovery and Adjustment Program was the Financial Sector Adjustment Program (FINSAP). Prominent in the FINSAP was the need to develop and promote the capital market and for that matter the stock exchange. It was also established to mobilize and allocate long-term savings for investment and economic growth (Donkor, 2001).
As a prelude in the setting of a stock exchange in Ghana, the government of Ghana commissioned a study into the need for and the viability of a stock exchange. Judith Aidoo provides enough historical literature on the basis for the setting up and incorporation of the Ghana Stock Exchange in 1989 in the report titled ‘Report on the Feasibility of a Stock Exchange in Ghana’. Prior to the feasibility study conducted by Aidoo in 1989, an attempt had been made in 1971 to set up the Accra Stock Exchange based on the recommendation of the 1989 Pearl Report. In spite of these efforts the stock markets never took off. However, before the operation of the GSE in 1990, trading in shares of some multinational companies in the mid 1970s was conducted over-the-counter by two non-bank financial institutions, namely National Trust Holdings Company and National Stockbrokers Limited (GSE Brochure, 1997).
The GSE was incorporated in July 1989 as a private company limited by guarantee under the companies code 1963(Act

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