CBN In Self Cleansing - Staff Lobby Top Government Functionaries To Retain Job - Business - Nairaland
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| CBN In Self Cleansing - Staff Lobby Top Government Functionaries To Retain Job by biina: 11:38pm On Mar 04, 2010 |
CBN in self cleansing, gives impetus to sector reforms - Staff lobby top government functionaries to retain job There are strong indications that the Central Bank of Nigeria (CBN) will soon commence self restructuring with the aim of engendering confidence into the ongoing reforms. The self cleansing, according to BusinessDay investigations, has become obvious given the level of compromise by the apex bank on some sensitive issues that were largely responsible for the crisis that engulfed the industry. Besides, the exercise is expected to give impetus to the second phase of reforms, anchored on four pillars of enhancing quality of banks, establishing financial stability, enabling healthy financial sector evolution, and ensuring the financial sector contributes to the real sector. The thinking among some discerning minds at CBN is that confidence in the reforms is waning, given contributions of the some of the staff to the crisis. Already, sources told BusinessDay yesterday that the magnitude of lapses at the apex bank was such that some of the top management staff would have been removed before now, but for the credibility problems on the reforms. Besides, the likely victims have commenced lobbying some top government functionaries and legislators to intervene in the purge, expected to take the shape of either weakening powers of some top management staff through further splitting of the departments or outright sack in some cases. For instance, Sanusi Lamido Sanusi, CBN governor, was said to be alarmed at some of the malfeasance and in some cases outright falsehood by the bank, which had often misled the investing public. Specifically, a source at the apex bank frowned at the impression by the CBN, supported by the International Monetary Fund (IMF), even up till early last year, that the sector was sound and that growth was a healthy development, which according to him, blunted the understanding of the real risks threatening the economy and the banking system. Also, series of warnings from the banking supervision department and even sent to Financial Sector Regulatory Consultative Committee (FSRCC) were not heeded. The source gave instances of some of the warnings that were not heeded to include; “Observed trends in banks’ stock trading” in November 2007; “… the stock prices of many banks have witnessed an exponential growth without a concomitant rise in the underlining financials of the affected institutions, ” “If the current trend is left unchecked, it may lead to a possible bubble burst that may imperil banks’ exposures in that regard, and in turn jeopardise the safety and soundness of the financial system.” But rather than tackling the challenges, CBN’s pronouncements, particularly in January 2009, were to the effect that the banks were not under threat, saying “significantly, Nigerian banks remain robust to withstand shocks.” Other earlier assurances by CBN included, “soundest the sector has ever been, with no unsound bank,” “our banking system is powering the Nigerian Stock Exchange. Today, Nigeria has the fastest growing banking sector in Africa, and one of the fastest in the world.” As some seasoned commentators have observed, “it has taken Nigeria less than three years to achieve what it took South Africa 20 years to achieve in the area of banking. To put it succinctly, a banking system has emerged, and will only get stronger for the benefit of the Nigerian economy,” August 2007. “We assure Nigerians and the world that CBN and NDIC are committed to ensuring that the Nigerian banking system remains the safest and fastest growing among the emerging markets. You can count on us to deliver on this!” June 2007. Also, the research department at the apex bank, according to a source, is currently under-equipped to access the latest economic data and analysis, while management information to analyse the risks in the system is inefficient, raising data quality issues with eFASS. In fact, the lack of co-ordination among financial services regulators, such as the Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM), Nigerian Deposit Insurance Corporation (NDIC), and Pension Commission (PENCOM), which comprised the FSCC, led to postponement of the meetings of the Committee for over two years, in spite of the widespread knowledge of bank malpractice and propensity to arbitrage. Consequently, CBN, it was also gathered, could not receive examination reports from SEC covering bank subsidiaries, even when it was obvious that a lot of malpractices were being perpetuated by banks through their subsidiaries, as the geographic separation of on-site and off-site examiners hindered the building of integrated and effective teams. Even among the top echelon at CBN, the general consensus is that the lax supervision of the banks was said to be the crux of the crisis that hit the industry, raising the tempo of imminent restructuring. However, according to a source, “the impending exercise has to be gradual because most of the potential victims have their own network and connections, even at the presidency.” http://www.businessdayonline.com/index.php?option=com_content&view=article&id=8999:cbn-in-self-cleansing-gives-impetus-to-sector-reforms&catid=1:latest-news&Itemid=18 |
| Re: CBN In Self Cleansing - Staff Lobby Top Government Functionaries To Retain Job by Seun(m): 3:06pm On Mar 09, 2010 |
Moved. |
| Re: CBN In Self Cleansing - Staff Lobby Top Government Functionaries To Retain Job by 4Play(m): 10:40pm On Mar 14, 2010 |
''the stock prices of many banks have witnessed an exponential growth without a concomitant rise in the underlining financials of the affected institutions, ” “If the current trend is left unchecked, it may lead to a possible bubble burst that may imperil banks’ exposures in that regard, and in turn jeopardise the safety and soundness of the financial system.'' How would the CBN regulate equity bubbles? |
| Re: CBN In Self Cleansing - Staff Lobby Top Government Functionaries To Retain Job by DisGuy: 2:27am On Mar 15, 2010 |
^^ by working with SEC and NDIC, instead of lending real business money tehy are lending their stockbrokers millions to buy their own shares! |
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