Banks have got a clean bill of health from the Central Bank of Nigeria (CBN), which ran a stress test on the financial institutions.
A statement from the CBN at the weekend disclosed that “the unaudited results of banks and the results released so far, indicated that economic headwinds had not significantly affected returns.”
The statement noted that banks had been directed to have effective risk management systems in place especially price hedging, adding that the CBN would continue to monitor banks to ensure sufficient internal retention of capital to serve as buffers.
The International Monetary Fund (IMF), in a statement last week said the outcome of the IMF Executive Board 2014 Article IV Consultation with Nigeria, commended the efforts of the CBN in ensuring financial system soundness.
According to the IMF statement, “Directors noted that financial soundness indicators remain above prudential norms, but the concentration of credit risks and foreign currency exposures call for continued close oversight.”
The Directors also commended the unification of rDAS and the interbank foreign exchange market rates, noting that greater exchange rate flexibility could help cushion external shocks.
The IMF statement further noted that Nigeria’s economic data are broadly adequate for surveillance, just as it agreed that tightening fiscal policy and allowing the exchange rate to depreciate while using some of the reserve buffer were appropriate responses to the recent fall in global oil prices.
In another development a face off may be brewing between the CBN and the Nigeria Deposit Insurance Corporation (NDIC) over the Corporation’s amendment bill before the National Assembly.
The CBN said it held various meetings to review the proposals made by the NDIC following the decision of the NDIC to amend its 2006 Act to ensure consistency with the goals of financial system stability.
The CBN said it drew the attention of the NDIC ”to several objectionable clauses in the proposed Act, which at the least sought to confer coordinate functions and powers on the NDIC.”
Specifically, the CBN said it drew NDIC’s attention to the implications of the enactment of the Act as proposed as it would: Make the NDIC a parallel/coordinate regulator for banks as CBN; Confer conflicting supervisory functions and powers on NDIC over banks; and Create overlapping regulatory responsibilities for the NDIC.
The powers that the Corporation sought to assume and exercise the CBN believes include: Power to Licence Banks, Power to Supervise Banks without Reference to the CBN, Power to Determine the Licences of Banks and Power to appoint itself as Liquidator.
The apex bank is billed to appear before the senate today to state its case on the proposed NDIC Act. Click to signup for FREE news updates, latest information and hottest gists everyday
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Emiefele the stooge. You are already a minus. Our economy is dead.
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