By InvestAdvocate

Lagos (INVESTADVOCATE)-Mazi Okechukwu Unegbu, Former Managing Director (MD) of defunct Citizen International Bank Wednesday advised Members of the National Assembly not to remove the autonomy of the Central Bank of Nigeria (CBN).

Mazi Unegbu, currently the Chief Executive Officer (CEO) of Maxifund Investments and Securities Limited, (A Member of the Nigerian Stock Exchange) said this at the Zenith Bank sponsored Finance Correspondent Association of Nigeria (FICAN) bi-monthly forum in Lagos Nigeria.

The former Bank CEO spoke on the topic: “Banks’ Financial Performance in 2011 and Q1 2012: Implication for the Capital Market.”

“Why is the National Assembly trying to amend the CBN Act? The reason and only reason is because there is one strong character that had taken them on. We should be thinking of building strong institutions, so that anybody who gets there, whether the person is weak or strong, will continue to evolve in the system.

“We wrote a memo to the National Assembly, telling them that it is not right to do that. We fought for the financial and instrument autonomy of the CBN and so people cannot just destroy it. They are doing that because they have seen Lamido Sanusi as being too vocal and too strong to contend with them, therefore they want to cut his power, not thinking of the danger it will cause to the financial system. In going after Sanusi, they are trying to destroy the central bank, which should not happen.”

According to Unegbu, the Banking Industry and Capital Market should compete, complement each other and therefore co-evolve within the financial system because that is the only way they can help the economy.

“It means that financial regulations have to be reviewed. In other words, regulators in the financial system have to rethink about themselves. The financial regulation coordinating committee should always be thinking about cooperation.

He affirmed that the Capital Market was very strong prior to 2008 things were done as if the Market existed alone in a system, where there are so many other contending financial institutions or financial markets.

“As at that time, everybody was making money and forgot that in making money, there is what we call Financial Friction, and this is what happened between the Banking Sector and the Capital Market” he said.

Unegbu further affirmed that currently, while the Banking System has a lot of investible instruments; the Capital Market has few instruments. “We only know about Shares and Stocks. This is because of the imperfect information in our system. Both the Banking System and Capital Market lack information and this makes it impossible for Banks to lend” he said.

He advised Regulators not to narrowly focus on Banks and the Capital Market separately, but should instead focus on them as an integral part of the system. “Regulators in the world over have learnt from the recent financial crisis that had happened, that focusing on Banks and Capital Market Regulations alone can be dangerous for the system” Unegbu said.

This is coming on the heels of the opposition of the CBN Amendment Act currently before the Nigeria’s Senate on Monday by Sanusi Lamido Sanusi, Governor of Nigeria’s Central Bank.

The Bill seeks to amend the CBN Act and allow provisions that would require the Apex Bank to submit its annual budget to the National Assembly for scrutiny and approval.

Sanusi argued that such legislation will subject the CBN to some undue political interference.

In the same vein, Sanusi was joined by a former CBN Governor, Mallam Adamu Ciroma, and a former Executive Director of the CBN, Professor Green Nwankwo.