CBN, SEC to Float Single Registry for Securities


From James Emejo in Benin, 07.28.2010                


A single Registrar to manage all securities in the country would soon be established as the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have agreed to work together in this regard.


Director of Supervision, CBN, Mr. Samuel Oni, made this known yesterday in Benin, Edo State at the ongoing 15th seminar for Finance Correspondents and Business Editors. Decision of the regulators to float a single Registry for securities came hours after the CBN was advised to ensure ‘orderly and transparent’ exit from the nine rescued banks so as to convince critics that it doesn’t nurture any hidden agenda in the ongoing reforms in the sector.


Oni also said that the apex bank would back domestic mergers and acquisitions that would result into stronger banks. Speaking on “Overview of the Four Pillars of the Banking Reforms”, he said the four-pillar reforms, which bother on enhancing the quality of the banks; establishing financial stability; enabling healthy financial sector evolution and ensuring that the financial sector contributes to the real sector, has been introduced to guarantee the safety and soundness of the banking system poor operational efficiencies in the banking system. Oni, who was represented by Usman Abdulqadir of the Banking Supervision department of the CBN, said as part of the ongoing reforms, the CBN will pursue improvement in Cost Structure for banks through cost control and business process outsourcing to check excessive costs occasioned by high salaries and He said the CBN is faced with the task of ensuring the reforms are not limited to individual banks alone but carried as a continuous process and aligned to changing market and regulatory developments.


CBN he added would will rely on strategic partners to drive the reform programme through adequate, timely and factual dissemination of information to Nigerians and the world at large. Also speaking yesterday on “Reforming the Nigerian Banking Sector: Some Emerging Issues” Managing Director, Abiodun Adedipe Consulting, Dr. Biodun Adedipe, said that the impressions about a hidden agenda will remain until the CBN exits the banks.He insisted that until the rescued institutions are liquidated, the owners remain shareholders of the banks refusal’ to former core investors…is especially important in banking and there are antecedents also in Nigerian Banking. “What has happened is that the value of their shareholdings has diminished significantly, and whenever new core investors come in, the old investors will obviously become minority shareholders…argument of the ‘right of first “Usually core investors that caused a bank’s technical insolvency are reluctant to inject fresh funds into the bank dictated by the regulatory authorities,” he said.  back-but subject to restrictions in management involvement or other such terms However, if they chose to inject fresh funds into the bank, they get the bank.


Adedipe said there are still issues bothering on sale to other investors or banks that are unrelated to the former core investors – a development that has raised argument about the proven technical capability and clean fund to be injected into such banks. He said: “We have witnessed in Nigerian banking, the sale of troubled banks to entities that never met this requirement and only to later compound the cost of such failed endeavours to the regulatory authorities and the economy in general.”


Besides, the financial sector expert said that the success of the Asset Management Company of Nigeria (AMCON) is contingent upon transparency in the appointment of its management based on competence and depth of experience in financial banking matters. Adedipe said banks have failed primarily because of the greed of major actors, stressing they will continue to fail given that “man is naturally greedy and only comes to his senses temporarily when he burns his fingers.’


He insisted that the reforms were called for to forestall a total collapse. “If the ongoing banking reforms were not embarked upon, we possibly by now would have lost all the gains of an evolving and sound banking system in the last several decades of unrelenting efforts to build. The Nigerian banking industry needed the kind of shock therapy that the ongoing reforms seem to be many 
people,” he said.The expert stressed among other things that a major test for AMCON is in determining discounts for the proposed issuance of bonds in exchange of discounted toxic assets.






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