The shocking and crushing effects of the 2008 global financial crisis that started at the
Like most of these countries, the effects on
Soon, Nigerian banks' bloated stocks turned into junk. This was made easier by the fact that their excessive exposure to oil and gas sector, margin lending, and speculative foreign portfolio investors in bank shares, made them to lack the necessary shock-absorbers from such financial fiasco.
If recalling their margin loans witnessed mass defaults, turned into nonperforming loans, why shouldn't the big holes created in banks' balance sheets put the banks in such a grave financial situation, especially in the absence of sound corporate governance practices and macro-prudential guidelines, as well as de-marketing, accounting frauds and media cover-ups?
As a result, with most of the banks failing capital adequacy, asset quality, management quality, earnings quality, liquidity and sensitivity to risk , otherwise called the CAMELS) stress tests, a test used in determining the state of health of financial institutions, bailing out these banks to prevent an impending contagion hitting the country's financial sector, became a matter of life-and-death. Besides Sanusi wisely injected N620bn into the nine banks so as to stop their bleeding, his excellent permanent solution to the mess was to ensure that the
And on his part, the managing director of AMCON never disappointed Sanusi for the difficult responsibility of navigating
Given the immense damage the global financial meltdown caused around the world, to proactively prevent such financial tsunami from reoccurring, most governments have wasted no time in getting back to the drawing board in an effort to fully redesign their financial sector architecture. The result has been the tightening up most countries' lax regulatory system, particularly banks' unrestrained creation of credit, inaccurate financial reporting, and the culture of dishonesty pervading the banking sector. Also, besides broadening standards and replacing narrower rules, increasing insider whistle-blower recognized as most important in checkmating corporate excesses, has been so protected and rewarded.
Since 2010 it was handed the illiquid and difficult-to-valuate bank assets to manage with the goal of helping the banks get rid of toxic assets so that they could be healthy once again, AMCON has done extremely well, especially taking into account the kind of lawlessness society ours is. In fact, received as a national duty, the no-nonsense toxic assets inspector-general, in riding the banks of their nonperforming loans, has since gone after all the criminals who defrauded the banks, no matter how highly place. Having no hiding place, most have either paid up or forfeited their important assets, in most cases had their pricey assets auctioned. So far, AMCON has succeeded in helping the banks regain their much-eroded public confidence, a life-and-death in universal fractional banking.
Besides supervising banks, trust and investment companies, and other depository financial institutions, the new commission should also be responsible for approving new banking institutions, as well as formulating prudential rules and regulations. Others include conducting a wide range of powers of examination as well as off-site and on-site investigations, detecting risks in the banking sector and establishing an early-warning system.
Most Popular Stories
- Criminal Investigation Opened Into James Foley's Death
- Rocket Explodes During U.S. Test Flight
- Koch Brothers Took Genes, Money in Different Directions
- Short-Term Loans Comes at a Heavy Price
- Apple Stock Bounces Back Big Time
- Is Diversity in the Eye of the Beholder?
- 'Mythbusters' Build Team Gets the Boot
- Florida Judge Rules in Favor of GOP Voter Map
- Jennifer Lopez Would Marry Again
- Investors Betting on ECB Stimulus Measures