odedele:

hw can u sack md witout recourse 2 d board,shareholders or even given an opotunity of defending thier self,y not finish conducting audit of d whole bank b4 taking action.NIGERIAN SHOILD RISE UP B4 DIS MALLAM KILL OUR INSTITUTNS WITH DAT D SOUTHERN LABOUR HARD 2 BUILD.

He didnt sack the MDs, he cleared the entire board.  He does not need to consult the shareholders, as the executives were appointed by the shareholders to protect the interests of the shareholders, while the CBN is responsible for protecting the interests of the depositors and the public. The shareholders will be able to appoint new executives once the interim period is over.

People talk about opportunity to defend their self, on what? This is not a case of my word against yours between the CBN and the bank executives
- The audit was carried out in cooperation with the banks
- That the 5 banks owe 90% of the debts in the EDW and were dragging other banks down with them is a fact. They were continuously borrowing from other banks and not repaying
- That they had huge amount of non-performing loans that were not reflected in their books is also a fact (e.g. Oceanic had N278Bn). The filings were being doctored to hide the non performing loans
- That said banks were over exposed in the capital markets and Oil & Gas, which were high risk investment areas
- That said banks had CARs that were below the regulatory 10% i.e. the were bordering on insolvency, and  one bank with CAR of 1.01% was technically insolvent.
So which of the above needed defending?
What they need to defend is if their actions were simply out of innocent incompetence or for personal gains, and that is what the EFCC is suppose to investigate.

The five banks were audited because of their constant borrowing (without repayment) in the interbank market. It was based on initial findings on the banks that the audit was expanded to cover all 24 banks and it is being carried out in batches (5 initial suspects and 5 others have been audited, while a second batch of 11 will be concluded by the end of August). So why should the CBN wait to fix what they know is wrong in some banks, simply because they are auditing other banks?

Given the constant borrowings from other banks, the CBN had 3 options to stop those 5 from dragging down others:
1. Suspend those banks from the interbank market. Essentially killing those banks as depositor will know that they are illiquid and will withdraw their money.
2. Withdraw the licenses from the banks and save them from slow death from illiquidity
3. Clear out the executives and try to reform the bank
4. Fold its arms and wait for the next 3 month while they complete the audit. Risking other banks and possibly a collapse of the sector.
I vote for option 3 ahead of the other 3, and that is what the CBN has done  as opposed to option 1 and 2. Option 4 shouldn't even be considered.

biina:

He didnt sack the MDs, he cleared the entire board.  He does not need to consult the shareholders, as the executives were appointed by the shareholders to protect the interests of the shareholders, while the CBN is responsible for protecting the interests of the depositors and the public. The shareholders will be able to appoint new executives once the interim period is over.

People talk about opportunity to defend their self, on what? This is not a case of my word against yours between the CBN and the bank executives
- The audit was carried out in cooperation with the banks
- That the 5 banks owe 90% of the debts in the EDW and were dragging other banks down with them is a fact. They were continuously borrowing from other banks and not repaying
- That they had huge amount of non-performing loans that were not reflected in their books is also a fact (e.g. Oceanic had N278Bn). The filings were being doctored to hide the non performing loans
- That said banks were over exposed in the capital markets and Oil & Gas, which were high risk investment areas
- That said banks had CARs that were below the regulatory 10% i.e. the were bordering on insolvency, and  one bank with CAR of 1.01% was technically insolvent.
So which of the above needed defending?
What they need to defend is if their actions were simply out of innocent incompetence or for personal gains, and that is what the EFCC is suppose to investigate.

The five banks were audited because of their constant borrowing (without repayment) in the interbank market. It was based on initial findings on the banks that the audit was expanded to cover all 24 banks and it is being carried out in batches (5 initial suspects and 5 others have been audited, while a second batch of 11 will be concluded by the end of August). So why should the CBN wait to fix what they know is wrong in some banks, simply because they are auditing other banks?

Given the constant borrowings from other banks, the CBN had 3 options to stop those 5 from dragging down others:
1. Suspend those banks from the interbank market. Essentially killing those banks as depositor will know that they are illiquid and will withdraw their money.
2. Withdraw the licenses from the banks and save them from slow death from illiquidity
3. Clear out the executives and try to reform the bank
4. Fold its arms and wait for the next 3 month while they complete the audit. Risking other banks and possibly a collapse of the sector.
I vote for option 3 ahead of the other 3, and that is what the CBN has done  as opposed to option 1 and 2. Option 4 shouldn't even be considered.

@biina your scrappy, desperate, unpaid attempt to defend your god Sanusi are pathetic.  Its the 'Kola nut', banking policies which you have mentioned above, which have created this mess. You are one of these fake Nairaland experts,  “I vote for option 3 ahead of the other 3”, stop dreaming, its hilarious!

Your idol could have done things cleanly without a media circus which has caused so much damage.  His intentions are sound but the results of his actions are not.

@ nolonging
From d way u started, calling Biina a fake expert, I thot U, being a genuine expert, will spell out the better way Sanusi  Shd av gone about it.

But for acknowledging dat he had good intentions but faulty approach, you are at least better than the 'northern agenda' propagandists

lol Funny folks


''Sanusi should have asked the CEOs to resign quietly, to avert panic''

Those suggesting the above, are saying Nigerians (and the world at large) are so dumb, they wouldn't find out why 5 Bank MDs resigned.

You people should stop daydreaming. There's no way 5 bank MDs would resign and people wouldnt read between the lines.

sanusi is up to something very mischievous.

They have started again.

Jarus:

@ nolonging
From d way u started, calling Biina a fake expert, I thot U, being a genuine expert, will spell out the better way Sanusi  Shd av gone about it.

But for acknowledging dat he had good intentions but faulty approach, you are at least better than the 'northern agenda' propagandists

Oh no  , even though I studied Banking at university I chose to go into software engineering instead - I prefer to write software thanks. My opinion after watching this: 

https://www.youtube.com/watch?v=-4MtUELti0I  was:

I watched the whole interview and I liken his approach to that of a fighter who has just knocked out his opponent with fifty unanswered punches and then says "I hope my opponent is okay".  He said he’s aim is to clean up the Nigerian banking system, but to clean up what? Is it to prevent banks from taking unnecessary risks? To stop the provision of fraudulent loans? He’s whole affair is quite ambiguous in that he wants to create a more robust Nigerian banking system but at the same time he has brought about mass panic.

The effect of his actions is that his task will become much more difficult now because:
- He has destroyed confidence in the banking sector - domestically and internationally
- He wants to promote a robust banking system he has just labelled as reckless and fired 5 CEOs

It was funny how he complained about how Nigeria's credit rating had been down graded as if it was unfair - after he had caused all the chaos himself.  The truth is he should have advised the CEOs discreetly (without any media circus) that they should curb their risks and recover their loans ASAP - this would not have destroyed confidence in the banking sector.   Then he could have embarked on an international tour to promote and strengthen the image of Nigerian banking which has been built up over a decade.  Nigerian banks would have been seen as the African miracle we have all been waiting for but, you know the rest.

Some say that he’s intervention was timely because the banks were on the brink of collapse; but the fact is those with financial knowledge know that banks are a necessary evil.  Banks are the lifeblood of the economy - they are a special type of business that must be well managed and regulated and if they fail? They must be nationalized or taken over.  Bank execs will always be greedy because their shareholders demand that – Profit maximization; so we must get rid of this fantasy that Nigerian bankers should not be greedy, Bankers will always be greedy! That is capitalism, if the banks fail the government must cleanup and create the environment for the banks to rebuild.  For example in the UK a Bank called Northern Rock had debts of around $180 Billion! Right under the nose of the FSA (Regulator) The CEOs were called reckless and they resigned on a nice pension and the bank was nationalized.  The CEOs were not arrested like in Nigeria, they even got paid their Bonuses! But in Nigeria the government pumps in a paltry $2.6 Billion and sends the EFCC after all the executives, doors being busted, CEOs fleeing for their life – what a mess!

But to be fair to Lamido, he seems to have good intentions and a noble cause but its seems as if he’s over exuberance has caused immense short-term damage. 
My feeling is that his 'Rambo style', cleanup will make the Nigerian banking sector weak and vulnerable to controversial takeovers, can anybody see any good coming out of his actions?

$2.6 billion is not a paltry sum and nationalizing the banks is not an option.

otokx:

$2.6 billion is not a paltry sum and nationalizing the banks is not an option.

$2.6 Billion is peanuts in global banking terms but its huge in an African banking context.

Why can't the banks be nationalized?

Nationalized
Dont go there!
Have you forgotten so soon what happened to all nationalized institutions in the good old days?

nolongTing:

Oh no  , even though I studied Banking at university I chose to go into software engineering instead - I prefer to write software thanks. My opinion after watching this: 

https://www.youtube.com/watch?v=-4MtUELti0I  was:

I watched the whole interview and I liken his approach to that of a fighter who has just knocked out his opponent with fifty unanswered punches and then says "I hope my opponent is okay".  He said he’s aim is to clean up the Nigerian banking system, but to clean up what? Is it to prevent banks from taking unnecessary risks? To stop the provision of fraudulent loans? He’s whole affair is quite ambiguous in that he wants to create a more robust Nigerian banking system but at the same time he has brought about mass panic.

The effect of his actions is that his task will become much more difficult now because:
- He has destroyed confidence in the banking sector - domestically and internationally
- He wants to promote a robust banking system he has just labelled as reckless and fired 5 CEOs

It was funny how he complained about how Nigeria's credit rating had been down graded as if it was unfair - after he had caused all the chaos himself.  The truth is he should have advised the CEOs discreetly (without any media circus) that they should curb their risks and recover their loans ASAP - this would not have destroyed confidence in the banking sector.   Then he could have embarked on an international tour to promote and strengthen the image of Nigerian banking which has been built up over a decade.  Nigerian banks would have been seen as the African miracle we have all been waiting for but, you know the rest.

Some say that he’s intervention was timely because the banks were on the brink of collapse; but the fact is those with financial knowledge know that banks are a necessary evil.  Banks are the lifeblood of the economy - they are a special type of business that must be well managed and regulated and if they fail? They must be nationalized or taken over.  Bank execs will always be greedy because their shareholders demand that – Profit maximization; so we must get rid of this fantasy that Nigerian bankers should not be greedy, Bankers will always be greedy! That is capitalism, if the banks fail the government must cleanup and create the environment for the banks to rebuild.  For example in the UK a Bank called Northern Rock had debts of around $180 Billion! Right under the nose of the FSA (Regulator) The CEOs were called reckless and they resigned on a nice pension and the bank was nationalized.  The CEOs were not arrested like in Nigeria, they even got paid their Bonuses! But in Nigeria the government pumps in a paltry $2.6 Billion and sends the EFCC after all the executives, doors being busted, CEOs fleeing for their life – what a mess!

But to be fair to Lamido, he seems to have good intentions and a noble cause but its seems as if he’s over exuberance has caused immense short-term damage. 
My feeling is that his 'Rambo style', cleanup will make the Nigerian banking sector weak and vulnerable to controversial takeovers, can anybody see any good coming out of his actions?

Your summary was beautiful. You have eloquently put out my exact thoughts. Nigerians may be rightfully overzealous about seeing the excesses of Bankers in the midst of their poverty. But regardless of how we feel emotionally, we should tunnel focus on the impact of actions taken. What effect would it have on our overall economy and economic confidence? If we do not have an enabling environment to lure investors into the country, rather than give them an extra reason not to dabble with Nigeria, then we will have in effect shot ourselves in our own feet.

Much respect @larez my brother.

dgreatrock:

Nationalized
Dont go there!
Have you forgotten so soon what happened to all nationalized institutions in the good old days?

Oh no, you see I simply mentioned the options available; your sentiments reveal a much deeper problem and that is you have no confidence in the government.  If that is the case, then you have no confidence in the present CBN govenor.  To be precise the CBN has no independence and as a result each successive government will continue to play political football with it.  The solution is: let the money men deal with a well regulated financial system and let the politicians do politics.  Otherwise we will carry on experiencing financial as well as political (Artificial) boom and bust.  Why has Mr Sanusi has not criticized Mr Soludo? Why has Mr Soludo kept quiet? Are his actions simply a change of management style? or an indirect way of discrediting his predecessor?

When the crisis unfolded, most were blaming the rich but most of them have paid up.  For example Otedola owed about $130million which is about 10% of his estimated wealth by forbes - thats responsible lending by the banks. I am not trying to apologise or defend their actions but its a basic financial fact that "the higher the risks the higher the rewards" The rich always borrow the most and pay the least taxes!  Furthermore, in Nigeria its hard to lend money to poor people because of the lack of information, so how can the banks establish a credit rating system?

So like the rest of you I will wait to see what unfolds but [size=13pt]it would have been nice to see Mr Sanusi build on the banking success and manage the problems rather than exacerbate the problems and wipeout the gains.[/size]

MY TAKE: Absurdity Inc.

Okey Ndibe

August 29, 2009 12:00AMT


Two years ago, I told a lawyer friend of mine that the so-called elections of 2007 were absurd. He retorted, “In Nigeria, my friend, absurdity makes sense.” The scandal rocking the banking industry dramatizes the point. Thanks to the courage and professionalism of the current leadership of the Central Bank, we now know that Nigeria’s two entrees on the list of the world’s billionaires make much of their hay with billions of naira borrowed from banks. The secret’s out: many of the men and women the local press dubs “stake holders” or “prominent Nigerians” owe their sheen to delinquent bank loans.

Here’s what’s even more devastating: that several Nigerian banks cooked their books. Year after year, they fudged figures, reported wholly fictitious levels of profit, and misled the public with tall tales of robust financial health.

Judging from the apex bank’s revelations, Nigerian banks are in sicker shape than many suspected. The greater absurdity in all this disaster lies, not in the details of hanky panky by banks and their cast of well-heeled debtors, but in the as yet unknown, or little known, litany of scandals.

Enlightened Nigerians ought to ponder how their country got to this sordid, sorry pass. In a country where pickpockets are frequently garlanded with tyres, doused with gasoline and put to instant, cruel death, why does the citizenry appear unperturbed when governors steal billions of naira? Why are too many unfazed when a few men and women use their political contacts - lieu of collateral - to secure billions in banks loans, default on their obligations, and walk away as the banks crash?

Why do some judges and justices so readily lend themselves to the designs of the criminal elements who hijack the resources of the state for their personal aggrandizement? Why have Nigerian lawyers not called for the resignation, or better still firing, of the judge who granted a scandalous perpetual injunction barring the country’s law enforcement agencies from investigating possible corrupt acts by former Governor Peter Odili of Rivers? Why do numerous reporters, columnists and editors trumpet the tomfoolery and inanities of public officials who work tirelessly to wreck Nigeria?

[b]This newspaper has offered some of the most thorough reports on the dire state of the five banks rescued from what seemed certain collapse. In a report titled “Ibori’s brain and the great bank heist,” Next’s Idris Akinbajo drew a compelling portrait of the involvement of one Henry Imasekha in the unfolding bank mess.

Described in the report as a “shadowy figure,” Imasekha is regarded by officials of the Economic and Financial Crimes Commission (EFCC) as “the business front for James Onafeni Ibori, the politically powerful former governor of Delta State.” Imasekha is a recurring decimal in the shenanigans that now pass for Ibori’s money laundering trial.

The anti-corruption agency, whose current leadership appears intent to botch Ibori’s prosecution, tagged Imasekha as the “character moving funds in Celtel, Oando and NOTORE Chemical Industries.” If the information supplied by the Central Bank is dependable, then Mr. Imasekha may be a serious contender for the title of bank wrecker-in-chief. Next reported that this man’s businesses brought Oceanic Bank and Intercontinental Bank to the brink of implosion. One of his companies, Ascot Offshore - which may actually belong to Mr. Ibori - owes N44.6 billion to Intercontinental. Another company, whose real owner may again be Ibori, is indebted to Oceanic to the tune of N32.3 billion.

More astonishing than the size of the debts is the disclosure that Mr. Imasekha got the loans without providing much by way of collateral. Yet, the man who amassed this debt doesn’t concede that anything is anomalous. Invoking his years as a banker to justify getting unsecured loans, Mr. Imasekha waxed:

“As an executive director in UBA and before then I had done 20 years in banking in Nigeria, are you telling me that if I walk into a bank, they will tell me that they don’t know me?” Coming from a man who is described as “a brilliant accountant,” with a degree from City University in London, this reasoning should inspire guffaws - except that, the scale of the scandal being so grave, this is no laughing matter.
[/b]
One wonders if this was how the man practiced banking, handing out huge loans to any face he recognized? What would his professors think of his statement? And why didn’t he use the wizardry of his management training to meet his loan obligations? Is this man really as hollow as his words advertised him?

I have this sneaking suspicion that Imasekha and his ilk speak in their unapologetic vein precisely because of their confidence that the Yar’Adua regime lacks the spine and moral authority to make defrauders pay. The fuss will pass. The despoilers of Nigeria will remind Yar’Adua that they put him in power. Governor Sanusi Lamido Sanusi will be invited to play the good boy or risk receiving the Nuhu Ribadu treatment.

When push comes to shove, I don’t see Yar’Adua standing firmly behind Mr. Sanusi’s plan to sanitize the banks and expose the rogues. That is, unless Nigerians collectively stand up and reject the absurd goings-on.

http://234next.com/csp/cms/sites/Next/Opinion/Columns/5450214-182/MY_TAKE:_Absurdity_Inc, csp

I must say I am new to all these political subjects, but this agenda of Sanusi sure makes me smell a rat! How come all of a sudden, some of the leading banks in our economy developed bad audit reports or whatever you call it? I have a feeling this man has got something really bad up is sleeves and I think this is another ploy by our handsome president to pocket our beloved Nigeria. From what I think I know, OBJ left a roubst banking sector which was even famed as the most vibrant sector in Nigeria. I was really shocked when I read about this news.
The other day I also read that Sanusi is now planning to sell the 'failed' banks to others. Good luck to you, Mr Lamido, keep up the good work, but please advise your beloved god-father to look into other more urgent matters such as the on-going ASUU strike and our epiliptic Power sector before he embarks on his next 'lesser hajj' to Saudi Arabia!!!

This article aptly summarizes my opinion:

http://www.huhuonline.com/index.php?option=com_content&view=article&id=276:cbn-induced-banking-crisis-a-solution--by-bayo-adeyinka-&catid=77:personal-tech&Itemid=177


[size=18pt]Home  Personal Tech  CBN-Induced Banking Crisis- A Solution – by Bayo Adeyinka [/size]
[size=28pt]CBN-Induced Banking Crisis- A Solution – by Bayo Adeyinka [/size]

At the risk of sounding like a broken record, I wish to reiterate that this current crisis which is totally uncalled for was induced by SLS, the CBN Governor. Events are now turning out to show his actions were not well thought out. You don't solve a problem by creating a bigger problem!

Now, a bigger mess has been created which will take nothing less than 4 years to clean up (quote me). A great crisis of confidence has been generated both in Nigeria and outside. Aside the flight to safety (where customers withdraw their deposits from banks that are perceived to be weak and take them to seemingly stronger banks) in Nigeria , Nigerian banks in other African countries have witnessed panic withdrawals or unusually desperate enquiries on their health. It is a boomerang effect. The gains of the past 5 years have been eroded with a single hare-brained statement!
 
Having realised his gross school-boy errors, SLS has now embarked on a clean-up assignment to foreign countries, trying to clean up the mess. Foreign banks have withdrawn credit lines. Letters of credits that have been opened by importers and guaranteed by foreign correspondent banks are at risk. Banks have been witnessing recall of transferred funds. Simply put, an import-dependent economy like Nigeria is in deep trouble. Credibility of Nigerian banks have been impaired. The issue is now beyond 5 so-called banks. ALL BANKS ARE NOW AT RISK.
 
What is basically a civil matter and could be resolved within the ambit of sense and the law courts have been turned into a show-boating event by the EFCC, which has suddenly woken up from stupor. I pray no cheque is written in the name of THE FEDERAL GOVT like Madam Waziri said because it will simply be re-looted by the recovered Abacha loot. Pray, an EFCC that couldn't do anything to Ibori and Kalu had to relocate to Lagos with 100 operatives. Is the EFCC a debt recovery agency? I wonder why a total expose was not done including publishing government agencies and parastatals who are owing!!! You can be sure the public sector is a greater culprit!
   
It beats me why the Board of these banks couldn't have been called succintly and shown the audit results (if any) and encouraged to show the CEOs the door through board removals that will seem like an action carried out in a normal course of business! Was Soludo not aware there were issues? Yes he was. That was why he made room for the Expanded Window for them to borrow to get into shape again. He knew the nation could not afford any imposion! To me, that is a more matured way of handling what could turn out to be an economic suicide. What is more apalling is that there will be loss of jobs,  or what else do you expect to happen to banks that are unable to sustain their business? They will want to cut down on costs to remain afloat and the very first consideration will be to prune number of staff. So much for Sanusinomics!
 
What are the immediate solutions to this perennial banking crisis?
   
1. The 5 banks' shareholders should immediately sue the CBN for an illegal take-over of their banks. The N100b each shared to those banks does not empower the CBN to appoint CEOs for the banks. I am happy Ibru and Akingbola have already challenged this action in court.
   
2. The office of the CBN Governor must be split into two. The CBN Governor, as the office is, is too powerful. In most developed countries (e.g. UK and the US ), the HM Treasury and the FSA (Financial Services Authority) are different bodies. The Reserve Bank regulates the monetary policies for the government while the FSA regulates the banks and other financial institutions including mortgage banks and insurance companies. The Central Bank should only be concerned with stuffs like inflation, interest rates and control of money in circulation. Full stop. The Other body should be concerned with regulating banks and the body will comprise of selected people from the financial sector, academia, etc. That is what can guarantee independence and ensure there are no conflicts of interest. I know it is the National Assembly that can change the CBN Act and we have a long way to go with those snoring senators and bumbling representatives.
   
3. There must be an imbibing of corporate governance in our institutions. Internal auditors must be empowered to blow the whistle when unethical practices are seen or perceived. They must have a reporting line to the Board and not the MD or their managers.

Bayo Adeyinka

nolongTing:

@biina your scrappy, desperate, unpaid attempt to defend your god Sanusi are pathetic.  Its the 'Kola nut', banking policies which you have mentioned above, which have created this mess. You are one of these fake Nairaland experts,  “I vote for option 3 ahead of the other 3”, stop dreaming, its hilarious!

Your idol could have done things cleanly without a media circus which has caused so much damage.  His intentions are sound but the results of his actions are not.

So what are these damages you speak of?
please list them with supporting evidence
The only damages are being caused by people like you who spread misinformation.
I really couldn't care less about Sanusi as a person, but I will laud and support any action I believe is a right step in taking this country forward.
Its people like you whose senses are clouded by ethnic bigotry, and cant see beyond the bridge of their nose, that are ruining this nations.

nolongTing:

Oh no  , even though I studied Banking at university I chose to go into software engineering instead - I prefer to write software thanks.

Typical aggrandizement of self importance like a toddler.
Of what relevance is this to the discussion at hand, or can we deduce that you are simply trying to add the lacking credibility to your posts.
Who cares if you were a professor at the havard business school

My opinion after watching this: 

https://www.youtube.com/watch?v=-4MtUELti0I  was:

I watched the whole interview and I liken his approach to that of a fighter who has just knocked out his opponent with fifty unanswered punches and then says "I hope my opponent is okay".  He said he’s aim is to clean up the Nigerian banking system, but to clean up what? Is it to prevent banks from taking unnecessary risks? To stop the provision of fraudulent loans? He’s whole affair is quite ambiguous in that he wants to create a more robust Nigerian banking system but at the same time he has brought about mass panic.

The effect of his actions is that his task will become much more difficult now because:
- He has destroyed confidence in the banking sector - domestically and internationally
- He wants to promote a robust banking system he has just labelled as reckless and fired 5 CEOs

It was funny how he complained about how Nigeria's credit rating had been down graded as if it was unfair - after he had caused all the chaos himself.  The truth is he should have advised the CEOs discreetly (without any media circus) that they should curb their risks and recover their loans ASAP - this would not have destroyed confidence in the banking sector.   Then he could have embarked on an international tour to promote and strengthen the image of Nigerian banking which has been built up over a decade.  Nigerian banks would have been seen as the African miracle we have all been waiting for but, you know the rest.

Some say that he’s intervention was timely because the banks were on the brink of collapse; but the fact is those with financial knowledge know that banks are a necessary evil.  Banks are the lifeblood of the economy - they are a special type of business that must be well managed and regulated and if they fail? They must be nationalized or taken over.  Bank execs will always be greedy because their shareholders demand that – Profit maximization; so we must get rid of this fantasy that Nigerian bankers should not be greedy, Bankers will always be greedy! That is capitalism, if the banks fail the government must cleanup and create the environment for the banks to rebuild.  For example in the UK a Bank called Northern Rock had debts of around $180 Billion! Right under the nose of the FSA (Regulator) The CEOs were called reckless and they resigned on a nice pension and the bank was nationalized.  The CEOs were not arrested like in Nigeria, they even got paid their Bonuses! But in Nigeria the government pumps in a paltry $2.6 Billion and sends the EFCC after all the executives, doors being busted, CEOs fleeing for their life – what a mess!

But to be fair to Lamido, he seems to have good intentions and a noble cause but its seems as if he’s over exuberance has caused immense short-term damage. 
My feeling is that his 'Rambo style', cleanup will make the Nigerian banking sector weak and vulnerable to controversial takeovers, can anybody see any good coming out of his actions?

see https://www.nairaland.com/nigeria/topic-316613.0.html

nolongTing:

Much respect @larez my brother.

Oh no, you see I simply mentioned the options available; your sentiments reveal a much deeper problem and that is you have no confidence in the government.  If that is the case, then you have no confidence in the present CBN govenor.  To be precise the CBN has no independence and as a result each successive government will continue to play political football with it.

Lack of confidence in a government run bank does not equate to lack of confidence in the government, or is the US citizens lack of confidence in a government run health care system equate into a lack of confidence in the US government?

The solution is: let the money men deal with a well regulated financial system and let the politicians do politics.  Otherwise we will carry on experiencing financial as well as political (Artificial) boom and bust. 

So who are the money men that will be doing the regulation?
The CBN board is a political appointment but the executive board members are not politicians.
If you are suggesting that the bank executives regulate themselves, then I would like you to provide an example of where a thriving banking sector is devoid of government regulation

Why has Mr Sanusi has not criticized Mr Soludo? Why has Mr Soludo kept quiet? Are his actions simply a change of management style? or an indirect way of discrediting his predecessor?

and of what use is Sanusi criticizing Soludo? Is the CBN not a continuous entity?

When the crisis unfolded, most were blaming the rich but most of them have paid up.  For example Otedola owed about $130million which is about 10% of his estimated wealth by forbes - thats responsible lending by the banks. I am not trying to apologise or defend their actions but its a basic financial fact that "the higher the risks the higher the rewards" The rich always borrow the most and pay the least taxes!  Furthermore, in Nigeria its hard to lend money to poor people because of the lack of information, so how can the banks establish a credit rating system?

Another misinformation. The problem was not with the banks lending to the rich, but that the loans were so much in default that they became non-perfroming. If the money owed by Otedola & co was so platry, why have they not been servicing their loans by making regular payments as defined in the terms of the loan? 
or because the amount is small compared to their net worth, they should not be required to pay the loans? 
The fact that most of them are now paying up after the action taken by the CBN shows that they were simply abusing the system, likely in collusion with the bank executives, else explain why said executives did not take strong enough action to recover the debts.

So outside of the US and Canada, how many other countries do you know that have personal credit rating systems?   or do you think the US is the world?

So like the rest of you I will wait to see what unfolds but [size=13pt]it would have been nice to see Mr Sanusi build on the banking success and manage the problems rather than exacerbate the problems and wipeout the gains.[/size]

and what are the problems that have been exacerbated and which gains have been wiped out? please itemize with supporting evidence.

biina:

So what are these damages you speak of?

Read carefully, read!!!!! I wrote:

But to be fair to Lamido, he seems to have good intentions and a noble cause but its seems as if he’s over exuberance has caused immense [size=14pt] short-term damage[/size].

You see in economics, one differentiates between the short-term and the long-term;  I have already mentioned that he has good intentions but his approach has caused damage to the financial sector, however in the long-run his actions may turn out to be a blessing to Nigeria. Its important to use the word 'May', because economics is not an exact science.

biina:

please list them with supporting evidence

[size=13pt]
S&P cut Nigeria's speculative sovereign long-term foreign currency credit rating one notch to B-plus from BB-minus last week, citing its costly bank bailout and falling oil revenues. [/size]

Source: http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLS6999120090828

biina:

The only damages are being caused by people like you who spread misinformation.
I really couldn't care less about Sanusi as a person, but I will laud and support any action I believe is a right step in taking this country forward.
Its people like you whose senses are clouded by ethnic bigotry, and cant see beyond the bridge of their nose, that are ruining this nations.

This is just bitter, subjective, waffle, Please give me one example where I have displayed in your words:  "Ethnic bigotry"  Give me ONE EXAMPLE, JUST ONE!!!!!!

biina:

Typical aggrandizement of self importance like a toddler. 
Of what relevance is this to the discussion at hand, or can we deduce that you are simply trying to add the lacking credibility to your posts.
[size=14pt] Who cares if you were a professor at the havard business school [/size]
see https://www.nairaland.com/nigeria/topic-316613.0.html

You lack of regard for ones educational attainments shows that you are an uneducated, irrational being.  However I will try to educate you by disecting your hilarious responses line by line.

biina:

[size=13pt] Lack of confidence in a government run bank does not equate to lack of confidence in the government[/size]

Keep humiliating yourself by displaying your inability to think logically

biina:

or is the US citizens lack of confidence in a government run health care system equate into a lack of confidence in the US government?

[size=13pt] I will use your dumb response to respond to your dumb question: [/size]

biina:

Of what relevance is this to the discussion at hand, or can we deduce that you are simply trying to add the lacking credibility to your posts.

Then you wrote this:--

biina:

So who are the money men that will be doing the regulation?

[size=13pt] Keep humiliating yourself by displaying your lack of BASIC knowledge [/size]

biina:


The CBN board is a political appointment but the executive board members are not politicians.
If you are suggesting that the bank executives regulate themselves, then I would like you to provide an example of where a thriving banking sector is devoid of government regulation

Phew!, how many times are you going to proove that you are a misguided slowpoke? Go and READ!!!! I wrote:

Banks are the lifeblood of the economy - they are a special type of business that must be well managed and [size=14pt] regulated[/size] and if they fail? They must be nationalized or taken over.

biina:

and of what use is Sanusi criticizing Soludo? Is the CBN not a continuous entity?

This is getting boring!!!!!  Then why has’nt Sanusi continued Soludos policies?

biina:

Another misinformation. The problem was not with the banks lending to the rich, but that the loans were so much in default that they became non-perfroming. [size=14pt] If the money owed by Otedola & co was so platry[/size], why have they not been servicing their loans by making regular payments as defined in the terms of the loan? 
or because the amount is small compared to their net worth, they should not be required to pay the loans? 
The fact that most of them are now paying up after the action taken by the CBN shows that they were simply abusing the system, likely in collusion with the bank executives, else explain why said executives did not take strong enough action to recover the debts.

Go and READ!!!! I wrote:

  The CEOs were not arrested like in Nigeria, they even got paid their Bonuses! But in [size=14pt] Nigeria the government pumps in a paltry $2.6 Billion and sends the EFCC after all the executives, doors being busted[/size], CEOs fleeing for their life – what a mess! 

Since when did Otedola become the Nigerian government?

biina:

So outside of the US and Canada, how many other countries do you know that have personal credit rating systems?   or do you think the US is the world?
and what are the problems that have been exacerbated and which gains have been wiped out? please itemize with supporting evidence

Stop talking about the US and Canada you are obsessed with these countries yet I never mentioned those countries Once!!! 

But I will answer your question again:  The following countries have a credit rating systems:  The United Kingdom, Ireland, Australia.

Problems exacerbated:
- reduction in the avilability of credit
- healthy banks susceptible to runs
- increase in business failures
- increase in unemployment
- increase in crime
- fall in GDP
- fall in investor confidence
- reduction in inward investment
- fall in foreign reserves (due to fund employed to tackle the problems listed above).

adigun101:

The first result of Sanusi's tenure is "Standard & Poors (“S&P”) recent downgrade of Nigeria’s BB- foreign currency and BB local currency long-term sovereign ratings to B+ with a stable outlook, where they cited fiscal flexibility constraints".  For all his activities just keep your eyes on the results and effects  before anyone passes passes judgement. 
And let no one say that the rating is irrelevant.

Don't believe the excuses they are using to justify the downgrade (Oill prices, ND crisis, Foreign reserve depletion etc )because, as Sanusi rightly pointed out, these situations have been around for a while now and are even improving. Looking at the timing of the downgrade, S&P have given Nigeria a damning assessment of Sanusi's actions !

http://www.vanguardngr.com/2009/08/30/16-bank-executives-for-trial-tomorrow/

"And as the effects of the clampdown on the banks by the Central Bank (CBN) begin to manifest, the governor of the apex bank, Mallam Sanusi Lamido may have commenced, with his London trip, the battle to save the nation’s economy from the backlash." 

He has also been said to have planned to approach S&P to explain Nigerias downgrade.

Sounds like he is now trying to save Nigeria from himself.
As the effects of Sanusi's erratic, draconian and (if in good fate) inexperienced, not well thought out actions start to trickle in, I will keep you posted.

[size=20pt][/size]YELSSS!!!!!


Agenda or no agenda (theres always an agenda)


Sell de demd banks if need be. Half of corporate americas owned by japanese and arabs. as a shareholder I need return for my investment. finish.

nairakween:

[size=20pt][/size]YELSSS!!!!!


Agenda or no agenda (theres always an agenda)


Sell de demd banks if need be. Half of corporate americas owned by japanese and arabs. as a shareholder I need return for my investment. finish.

If dem sell bank all shareholders money don burn be that . The best the shareholders can get will be that the shares of the banks would be grossly undervalued. Oceanic shares fit come be like 70kobo

na_so:

If dem sell bank all shareholders money don burn be that . The best the shareholders can get will be that the shares of the banks would be grossly undervalued. Oceanic shares fit come be like 70kobo

that is exactly the idea . . . go and read the March report about the agenda in the Vanguard.

You would notice that wat is happening now is exactly what was reported then that the intentions were.

Those investors (whoever they are) intended to tank the share values of those banks so as to acquire them at a ridiculously low value (something that is obvious that would happen now the even the CBN Governor is already talking about selling someone else property i.e. the shares).

Please leave that Vanguard agenda piece first jo. It screams of defense pr from people who knew they would go down. What of the independent reports that showed the fault lines in our financial sector? Punch published a summary of one and the paper mysteriously "sold out". We can jaw jaw all we want.
Fact is five banks were reponsible for hogging 90% distress funds (my term) for one year.
while a few banks responded to the uncertainty by infusing more transparency others created more rope for their own hanging. The filth that will emerge will be amazing so Im not shocked this agenda campaign is being pushed to distract us. Details of Ibori and his shenanigans alone can bring down Oceanic. Taking a company loan with a state owned asset as collateral. Smart bastard had a front though.

nairakween:

Please leave that Vanguard agenda piece first jo. It screams of defense pr from people who knew they would go down. What of the independent reports that showed the fault lines in our financial sector? Punch published a summary of one and the paper mysteriously "sold out". We can jaw jaw all we want.
Fact is five banks were reponsible for hogging 90% distress funds (my term) for one year.
while a few banks responded to the uncertainty by infusing more transparency others created more rope for their own hanging. The filth that will emerge will be amazing so Im not shocked this agenda campaign is being pushed to distract us. Details of Ibori and his shenanigans alone can bring down Oceanic. Taking a company loan with a state owned asset as collateral. Smart bastard had a front though.

Corrupt politicians and loan sharks need to be condemned, and jailed if found guilty, no questions about that. Of course bankers found to be corrupt should be fired to clean up the system, but from what I have seen so far, the line between criminal intent vs. poor(risky) judgement on the part of some of trhe bankers appears too thin. So thin, that the method adapted by the CBN is making it even more blurry.

Is there any reason to creat a 10 ton problem while solving a 10 pounds problem?

sanusi, in a rush to SANUSITISE the banking sector has not only flawed in the exercise.he seems to be acting and playing out a script.Vanguard's report should not be discarded in a rush.The truth is,the exercise was done in a rush without recourse to fair hearing and fair play as would have been expected in legal circles.Only time will tell sanusi's sanusitisation motives with his plan of foreign investors aquisition of a property that rightly belongs to shareholders.he's playing on shareholder's intelligence and i feel he should be cautioned before his sanusitisation policies is let out of the bag.the question is, ?why did he rush to release audit report of 10 banks with 5 ailing without having audited the rest 14.

Is it about corruption first? That will come later.
Its about CBN moving in to stop a cave in of banks that are big enough (thanks to consolidation) to bring all the others down with them.
Figures are available but we choose to close our eyes. I saw the wishy washy ads Cecelia ibrus lawyers have out. Scanning the Vangaurd piece in one and listing all the great things oceanic has done in the second. PUHLEASE, ARE THEY A PR FIRM OR ARE THEY LAWYERS! Quite franky if thats what they want to do in court then CBNs facts are real and its a shame. I expected to see statements, figures something beyond you are being selective blah blah blah.

Oceanic is your liquidity -26% Yes or No. Gosh we are doomed in this country. CBN is well within its rights. Thank goodness the other banks where not the foolish virgins.

THIS IS MY TAKE ON THE ISSUE,

RUSH!!!!! RUSH!!!!!!!!! AND RUSH!!!!!!!
THIS HAS BEING MY GROSS WITH THIS WHOLE THING SINCE IT UNFOLDED, WHY DO EVERYTHING IN SUCH A RUSH.
IN CIVILISED WORLD OR EVEN SEMI-CIVILISED WORLD THESE KIND OF CASES TAKE TIME TO INVESTIGATE WHICH BY EVERY STANDARD IS JUSTIFIABLE.

TODAY WE VE STARTED HEARING PPLE SCREAMING NORTHEN AGENDA!!!!!!!!!!!!! NORTHEN AGENDA!!!!!!!!! THIS SORT OF RUSH IS WHAT COULD GIVE LEVERAGE TO SUCH SHOUTS, 
WHY IS EVERYTHING DONE IN SUCH A RUSH?,
WHAT OF ALL THE LAWS THAT VE BEING TRAMPLED (BOIF etc) .
IS IT OK TO BREAK THE LAW IN ORDER TO KEEP IT?
WHAT OF THE NAMES THAT WERE WRONGLY INCLUDED?
WHAT OF THE FIGURES THAT WERE WRONGLY INPUTED?
EVEN IF THESE CAN BE CORRECTED . WHAT OF THE EMOTIONAL TRUAMA THIS WHOLE EPISODE HAVE CUZED THEIR FAMILIES AND FRIENDS, THE DISTRUST IT HAS BROUGHT TO THEM.

DON'T GET ME WRONG,  I'M NOT AGAINST WHAT IS DONE BUT THE WAY AND MANNER  IT IS DONE IS WHAT GIVES ME CONCERN,  ,

I HOPE WE WILL NOT ALL WAKE UP 1YEAR LATER TO FIND OUT THAT THIS WAS ALL PART OF A  SINISTER MOVE TO SATISFY A HANDFUL.

CAUSE WE ARE ALL STAKEHOLDERS IN THIS ENTITY CALLED NIGERIA.

GOD BLESS NIGERIA

Time does reveal many things but for now SANUSI is doing ok.