Only in Nigeria i can see someone will fault the foundation of a building which took years to build, demolished it within a month, and yet to lay a single block for a new foundation after 8months, but can still boldly criticise the former structure. Sanusi after 8months of his cleaning exercise, which caused a lot of panic and lost of confidence on the mind of depositor. We are yet to know what his plan is on how he is gonna rebuild, and restore the public confidence back on the sector. The same thing the Republicans are attacking obama for. After one year in office you still blame your failure on past administration. If you say u are the best and there to make a difference after 8months we should be able to see a sign of it. Its easy for anyone to do wht he did, but recovering from the negative effect of his action is what the whole Nigerians are waiting for. That only we can judge if he is better that his predecessor or not.

[b]"Challenging the CBN governor on the first issue in the blueprint, that is, enhancing the quality of banks, the group noted that it is ambiguous because it fails to outline the parameters to measure the quality of banks.

More importantly, the group tasked him for doing the opposite of what he wishes to accomplish, accusing him of engineering a crisis that has forced the cream of Nigerian companies to seek loans abroad, citing the cases of Dangote Group, which recently paid off its loans to Nigerian banks only to approach Standard Bank of South Africa for a $350 million loan, and Eterna Oil Plc that is seekingN1.2 billion from the Japanese bond market.

The Group claimed that before the CBN governor "created crises for Nigerian banks, the smallest Nigerian Bank had a guaranteed foreign credit line. Now, no

Nigerian bank can get the smallest foreign credit line without a CBN guarantee, a clear indication of how much confidence has dropped in the Nigerian banking system under the CBN Governor, Mallam Sanusi Lamido Sanusi."[/b]

biina:

This is the flaw in your position. You have no definitive position on the status of the banking sector at the time Sanusi took over, and thus you cannot judge if his actions were appropriate. You cannot say something is 'demonstrable worse', if you dont know how bad it was in the first place, else what is the basis of your comparison?

When you are ready to make a clear statement (back with facts and figures) on the virility of the banks as at May 2009, only then can you comment on the best way forward and whether Sanusi's actions were right or wrong.

I pasted the above quotation from the article earlier posted by by mikeansy, because of your persistent and sometimes blind institance to show proof. If lose of letters of credit and strong lending capacity are not parameters to measure the strenght of our banks, what is?
The strenght our banks are not definitely going to be judged by how many sing and dance peroformamces Sanusi does out there.

princekevo:

Only in Nigeria i can see someone will fault the foundation of a building which took years to build, demolished it within a month, and yet to lay a single block for a new foundation after 8months, but can still boldly criticise the former structure. Sanusi after 8months of his cleaning exercise, which caused a lot of panic and lost of confidence on the mind of depositor. We are yet to know what his plan is on how he is gonna rebuild, and restore the public confidence back on the sector. The same thing the Republicans are attacking obama for. After one year in office you still blame your failure on past administration. If you say u are the best and  there to make a difference after 8months we should be able to see a sign of it. Its easy for anyone to do wht he did, but recovering from the negative effect of his action is what the whole Nigerians are waiting for. That only we can judge if he is better that his predecessor or not.

1. Its a bit of overkill to say that Sanusi has demolished the structure he met on ground. Lets be objective. he may have altered it, significantly too. But to say he demolished it is a bit much. Yes, the action was abrupt and a shock to the financial system, but to categorically say that his reforms have failed after 8 months is, well, hasty. "Panic & lost confidence" happened, and is happening the world over. As far as that goes, Nigerians are in good company.

2. I do believe that the newspapers have been awash recently with the 4 basic pillars of Banking sector reform in the recent past. I think its safe to assume that's his plan for restoring confidence in the sector.

3. That he pointed out the lapses in regulation that preceeded his tenure can hardly be said to casting blame. Fact: regulation was weak in Soludo's CBN.

4. Some people may have missed it, but where exactly did Sanusi say he was the best? forgive my ignorance in the matter.

5. Its taken 20 years for the world to conclude that the bailout of the Japanese banking industry following the crash of 1987 (when the Nikkei index lost almost half its value in a single day heralding the start of a 20year + economic slump) was probably not for the best; that its probably better for bad debts on banks books to be purged in one fell swoop causing temporary pain than to draw it out for say, 20 years. Funnily, the same Western nations that pointed out to Japan that such a move was inimical to economic growth have rolled out all stops in TARP and its British and Eurozone variant.

Simply saying, 8 months is too short a time to judge conclusively that Sanusi's reforms have failed.

6. Like a wise man once said, "and this too shall pass".

insideview:

1. Its a bit of overkill to say that Sanusi has demolished the structure he met on ground. Lets be objective. he may have altered it, significantly too. But to say he demolished it is a bit much. Yes, the action was abrupt and a shock to the financial system, but to categorically say that his reforms have failed after 8 months is, well, hasty. "Panic & lost confidence" happened, and is happening the world over. As far as that goes, Nigerians are in good company.

2. I do believe that the newspapers have been awash recently with the basic pillars of Banking sector reform in the recent past. I think its safe to assume that's his plan for restoring confidence in the sector.

3. That he pointed out the lapses in regulation that preceeded his tenure can hardly be said to casting blame. Fact: regulation was weak in Soludo's CBN.

4. Some people may have missed it, but where exactly did Sanusi say he was the best? forgive my ignorance in the matter.

5. Its taken 20 years for the world to conclude that the bailout of the Japanese banking industry following the crash of 1987 (when the Nikkei index lost almost half its value in a single day heralding the start of a 20year + economic slump) was probably not for the best; that its probably better for bad debts on banks books to be purged in one fell swoop causing temporary pain than to draw it out for say, 20 years. Funnily, the same Western nations that pointed out to Japan that such a move was inimical to economic growth have rolled out all stops in TARP and its British and Eurozone variant.

Simply saying, 8 months is too short a time to judge conclusively that Sanusi's reforms have failed.

6. Like a wise man once said, "and this too shall pass".

First i concluded my post with the following statement

Its easy for anyone to do wht he did, but recovering from the negative effect of his action is what the whole Nigerians are waiting for. That only we can judge if he is better that his predecessor or not.

I would never said Sanusi cleaning exercise was wrong, but the approach to it. Am still very much convinced that there are better way he should have handled to the same cleaning exercise with less effect , which the panic and lost of confidence and lost of jobs he created in that sector. Though, from concluding statement up there i cannot judge him at the moment until after his tenure we will know his time and that of Soludo which one was better for a developing economy like Nigeria.

What am saying is that, haven't yet seen any sign of recovery in that sector after 8months of his tenure he should shut up and do his job. You can only criticise your predecessor when you have a clear distinction in your tenure from his, not when you are in the mist of a rebound from the effects your policy created.

I still believe the Consolidation Exercise from Soludo was the best thing that happened to Nigerian banking sector. The first time i think an LC from a Nigerian Bank can be confirmed and accepted internationally. Have we thought of what the financial state of Nigeria would have been during the last global economic melt down, if not for the consolidation? Sanusi was able to point out 5 banks that was at the verge of failing, becoz someone made it more easy to do that. What if he was the CBN governor in the days of mushroom banks, how many can he rescue and how many would have survived the economic crises?

So Sanusi haven't achieved anything yet, but faulting and not seeing the great positive effect of the exercise to Nigerian banking sector to me is as being unprofessional. I see a man who should have built from the foundation of his predecessor, amending the lapses which he think his predecessor over looked, not creating an alarm on the work of his predecessor and discredting his deeds.

^^^^
@Princekevo
Thank you, my points exactly too. Nobody has ever said Sanusi should not have done house-cleaniung if neccessary, the problem has been that he dramatizes the whole episode. He would have effectively removed as many CEOs as he wanted by simply telling the boards and shareholders that he, as the CBN governor has lost confidence in the various individual, give them time to appoint a replacement, and there would have been no hew and cry from anybody. Also, he would have detailed and the alleged and percieved excess of the banks and their officials, hand them over to the necessary police and investigating agencies, but he certainly had more fun playing the banker, the cop, and the judge at the same time

princekevo:

First i concluded my post with the following statement
I would never said Sanusi cleaning exercise was wrong, but the approach to it. Am still very much convinced that there are better way he should have handled to the same cleaning exercise with less effect , which the panic and lost of confidence and lost of jobs he created in that sector. Though, from concluding statement up there i cannot judge him at the moment until after his tenure we will know his time and that of Soludo which one was better for a developing economy like Nigeria.

What am saying is that, haven't  yet seen any sign of recovery in that sector after 8months of his tenure he should shut up and do his job. You can only criticise your predecessor when you have a clear distinction in your tenure from his, not when you are in the mist of a rebound from the effects your policy created.

I still believe the Consolidation Exercise from Soludo was the best thing that happened to Nigerian banking sector. The first time i think an LC from a Nigerian Bank can be confirmed and accepted internationally. Have we thought of what the financial state of Nigeria would have been during the last global economic melt down, if not for the consolidation? Sanusi was able to point out 5 banks that was at the verge of failing, becoz someone made it more easy to do that. What if he was the CBN governor in the days of mushroom banks, how many can he rescue and how many would have survived the economic crises?

So Sanusi haven't  achieved anything yet, but faulting and not seeing the great positive effect of the exercise to Nigerian banking sector to me is as being unprofessional. I see a man who should have built from the foundation of his predecessor, amending the lapses which he think his predecessor over looked, not creating an alarm on the work of his predecessor and discredting his deeds.

1. Sanusi's drama:- is intergral to his style. If we agree its wrong, its probably a human failing. He could probably have done what he did with a lot less drama, though somehow I think people would have complained about the tactic as well.

2. Soludo's consolidation exercise WAS the best thing that had happened to the industry. Up to that point. Standards are raised to be upped, not rested on.

3. All things revert to the mean. The excesses of the bubble epoque didnt take 8 months to build up. I doubt they will be corrected in 8 months. In the mean time, we have a functioning financial sector made up of banks with verifiable assets and liabilities. And a much saner stock market.

4. If my memory serves correctly, and correct me if I'm wrong, was it not the stress tests inititiated by Sanusi on assuming office that definitely sorted out the 5 banks? I seem to remember that before then, all we had to judge on was half baked newspaper adverts, "fitch" and all sorts of shady ratings, falsified accounts, and some outright sleazy propaganda from the banks. Then again, my conclusions may have been wrong.

5. We didnt see the results of Soludo's consolidation in 8 months, lets try not to apply double standards.

6. In my opinion, this is a man building on his predecesors achievements, correcting lapses as he goes along. You may not agree with his style but u can hardly accuse him of not doing anything. (I assume thats the whole point of posting, you dont agree with his methods).

7. Sanusi did not create the alarm, the newspapers did a lovely job at that. and the public saw what they wanted to see. Let the mist clear a little. Then let's review our opinions.

8.

princekevo:

Am still very much convinced that there are better way he should have handled to the same cleaning exercise with less effect , which the panic and lost of confidence and lost of jobs he created in that sector.

And yes, there probably could have been a better alternative, but leadership is not about making a perfect decision; its about making a decision and taking action, and correcting mistakes as events unfold.

insideview:

7. Sanusi did not create the alarm, the newspapers did a lovely job at that. and the public saw what they wanted to see. Let the mist clear a little. Then let's review our opinions.

Are you for real
When Sanusi insists on being before the press everyday?

naijaking1:

Are you for real
When Sanusi insists on being before the press everyday?

1. I dont believe Sanusi is calling news conferences daily. The news media follow Sanusi mainly becuase he sells papers. QED. He says what he has to say, and most times its interpreted by the media to suit whatever agenda (that word again) they happen to be championing at the time. And the gullible Nigerian public swallow whatever opinion is fed to them in the name of "news". Apparently, if you saw it in the newspaper, it must be true. (Brings to mind the extensive WMD coverage in America before the Iraqi invasion).

2. Its like saying Princess D (not that i'm comparing) insisted on being in the media everyday. Even dead, she's still selling papers.

insideview:

1. I dont believe Sanusi is calling news conferences daily. The news media follow Sanusi becuase he sells papers. QED. He says what he has to say, and its interpreted by the media to suit whatever agenda (that word again) they happen to be championing at the time. And the gullible Nigerian public swallow whatever opinion is fed to them in the name of "news". Apparently, if you saw it in the newspaper, it must be true. (Brings to mind the extensive WMD coverage in America before the Iraqi invasion).

2. Its like saying Princess D (not that i'm comparing) insisted on being in the media everyday. Even dead, she's still selling papers.

My brother, as an ethical Manager there are some information of the organisation that are not meant to be released to the public no matter how many times u are on the media. I have never seen any good management that will come to the media to create alarm that they are in a serious trouble even when it is obvious, unless the information got licked out, probably on the process seeking for refinancing or government assistance. You don't release information that creates panic in the mind of your costumers to the media. Am not against Sanusi always being in the media, but his in ability to manage or control the information he releases to the public, for me with my lil managerial experience i would give him zero In that aspect. He this is the CBN governor and answereth to no man as he said. Why all the alarm on the media while he have the independent capacity(as he said) to sanitize the industry and refinance the failed once, without even the knowledge of the legislature?

Now indeed the 5 banks were sanitized and refinanced, but they still need to win back their customers confidence, before they could regain their stand. You and i knows how how many years and what it gonna take such a sensitive organisation to regain a confidence already lost and public trust. Not even in an environment as ours.

princekevo:

My brother, as an ethical Manager there are some information of the organisation that are not meant to be released to the public no matter how many times u are on the media. I have never seen any good management that will come to the media to create alarm that they are in a serious trouble even when it is obvious, unless the information got licked out, probably on the process seeking for refinancing or government assistance. You don't release information that creates panic in the mind of your costumers to the media. Am not against Sanusi always being in the media, but his in ability to manage or control the information he releases to the public, for me with my lil managerial experience i would give him zero In that aspect. He this is the CBN governor and answereth to no man as he said. Why all the alarm on the media while he have the independent capacity(as he said) to sanitize the industry and refinance the failed once, without even the knowledge of the legislature?

Now indeed the 5 banks were sanitized and refinanced, but they still need to win back their customers confidence, before they could regain their stand. You and i knows how how many years and what it gonna take such a sensitive organisation to regain a confidence already lost and public trust. Not even in an environment as ours.

1. The beauty of capitalism (that we want to ape), if these banks cannot win back confidence, they will be taken over, merged, consolidated (whatever term applies). Its called "creative destruction", one of the tenets of true capitalism. BUT, they will not go down with depositors funds trapped in them and no one called to account for thier mismanagement and eventual demise as had been the case in Nigeria previously.

2. Sanusi's ability or otherwise to control the sensitive information "leaked" to the public, where we agree its wrong, is, well, lamentable. But, on the balance, can we say, his head is in the right place? his actions have yielded results not all bad? and that our banking sector is the better for it? that it has yielded the greatest good, to the greatest number of Nigerians?; from where i'm standing:- Yes we can

naijaking1:

I pasted the above quotation from the article earlier posted by by mikeansy, because of your persistent and sometimes blind institance to show proof. If lose of letters of credit and strong lending capacity are not parameters to measure the strenght of our banks, what is?
The strenght our banks are not definitely going to be judged by how many sing and dance peroformamces Sanusi does out there.

So letter of credit is what is used to measure the health of a bank?
I have simply asked you to clearly state your position on the health of the banks before the Sanusi intervention. Was the banking sector in good health? if not, how bad was it? It is only you define your position on the state of the banks (and back it uop with facts and figures) that you can then judge if Sanusi's action are write or wrong, but seems you would rather assume his actions are wrong and then try to find evidence in support.

biina:

So letter of credit is what is used to measure the health of a bank?
I have simply asked you to clearly state your position on the health of the banks before the Sanusi intervention. Was the banking sector in good health? if not, how bad was it? It is only you define your position on the state of the banks (and back it uop with facts and figures) that you can then judge if Sanusi's action are write or wrong, but seems you would rather assume his actions are wrong and then try to find evidence in support.

Letters of credit are not the only indicator of a healthy banking system, but it's one of the most important especially in the eyes of foreign business partners. Perception of our financial stability by foreign partners is directly related to issuance of letters of credit for importation of goods and services, but without lecturing you about letters of credit, I'm surprised that you should even ask that question.

What's next? That lending money is a good measure of banking strenght? And when Dangote had to shopping for loans overseas, what do you say about our own local banking strenght? The interests from these loans could easily employ a few thousand more Nigerians.

Nobody has ever said that things were perfect under Soludo, but unlike Sanusi, Soludo seemed to know that creating wealth, prospering the economy, and maintaining a stable banking industry is like the proverbial "sausage making"----the process if often dirty, but needs continuous and persistent cleaning up, regulation, and updates without stopping the whole process, because people really need those sausages.

naijaking1:

Letters of credit are not the only indicator of a healthy banking system, but it's one of the most important especially in the eyes of foreign business partners. Perception of our financial stability by foreign partners is directly related to issuance of letters of credit for importation of goods and services, but without lecturing you about letters of credit, I'm surprised that you should even ask that question.

What's next? That lending money is a good measure of banking strenght? And when Dangote had to shopping for loans overseas, what do you say about our own local banking strenght? The interests from these loans could easily employ a few thousand more Nigerians.

Nobody has ever said that things were perfect under Soludo, but unlike Sanusi, Soludo seemed to know that creating wealth, prospering the economy, and maintaining a stable banking industry is like the proverbial "sausage making"----the process if often dirty, but needs continuous and persistent cleaning up, regulation, and updates without stopping the whole process, because people really need those sausages.

Again you miss the point, and are jumping the gun. You seem bent on analysing events in isolation.

The refusal by foreign banks to honor letters of credit without a CBN guarantee was born out of the fear that the Nigerian banks may not be as healthy as they claim i.e. the foreign banks risking losing their money. So the question then becomes, were the Nigerian banks as healthy as they claimed? and if not should the CBN have covered up for them just to allow them continue getting LoCs?

The issue of Dangote is often misinterpreted as evidence against our banking sector.
Q: Did Dangote seek a loan from the banks and did not get it? No,
Dangote had a syndicated loan of $1.2 billion dollars he took in May 2008, that he chose to pay back in January 2010, simply because he got a more suitable facility from Standard Charted. The $350 Million facility is more a line of credit and not a loan, allowing him to draw on funds as at when needed (he has only drawn an initial amount of about $100m), as opposed to a project loan, which commits him to a larger sum, even though he might not need all the funds at once. He was having to service the $1.2B loan even though the expansion project the money was earmarked for was not in full swing. Also, the recent dip in crude oil prices means that forex rates are more favorable outside of the country and thus it suits companies like dangote's which have forex obligations (e.g. the deal with Siemens) to get te funds outside. So, even if Sanusi hadnt not acted, Dangote would have still gone for the foreign financing, as I doubt any Nigerian bank is willing to expose themselves to such a huge 'on demand' forex facility. It is the same way you need collateral to get a substantial loan in Naija, it is how our banks do business for now.

From your previous posts, you disagree with Sanusi's actions. My contantion is that you cannot agree/disagree with Sanusi's actions unless you have a reference in which you are evaluating it i.e., you cannot evaluate his actions in a vacuum. For example, using two extreme cases, if the banking sector was hale and hearty, then Sanusi's actions were uncalled for and wrong, but, if the banking sector was on the verge of collapse, then Sanusi's actions were right as the system has been saved from collapsing.

Your references to letters of credit, loans, rating or whatever are only relevant after you have ascertained the status of the banks before Sanusi's actions.Without that initial positional judgment, for all you know things could have been much worse or much better, with nothing to indicate either way.

So simple questions:
1. Was Sanusi's description of the state of the banking sector when he took over accurate?
2. If yes, then we can talk about the appropriateness of Sanusi's actions, and if not, give a more accurate picture of things, backing it up with relevant facts and figures (like CAR) in which case, Sanusi's action are wrong as they were based on a faulty premise)

but you cannot keep condemning his actions when you have no idea what the accurate state of the banks were at the time he took over.

naijaking1:

Letters of credit are not the only indicator of a healthy banking system, but it's one of the most important especially in the eyes of foreign business partners. Perception of our financial stability by foreign partners is directly related to issuance of letters of credit for importation of goods and services, but without lecturing you about letters of credit, I'm surprised that you should even ask that question.

What's next? That lending money is a good measure of banking strenght? And when Dangote had to shopping for loans overseas, what do you say about our own local banking strenght? The interests from these loans could easily employ a few thousand more Nigerians.

Nobody has ever said that things were perfect under Soludo, but unlike Sanusi, Soludo seemed to know that creating wealth, prospering the economy, and maintaining a stable banking industry is like the proverbial "sausage making"----the process if often dirty, but needs continuous and persistent cleaning up, regulation, and updates without stopping the whole process, because people really need those sausages.

1. The basis of the Nigerian economy is sadly, Oil. Our economy will swing between highs and lows based on the international price of the product. Soludo & the political class of 07 were indeed lucky to have been in the saddle in such a fortuitous time. Soludo did no magic of wealth creation. His consolidation policy allowed the Banks to (if I may) "spread the wealth, a lot of which went to creating a raging bubble in the stock market as the absorptive capacity of our economy was and is still quite limited. At the zenith of the bubble, i doubt the portfolio of bank lending to productive enterprise approached 30% of thier total credit portfolio (lets not even talk about SMEs).

biina:

So simple questions:
1. Was Sanusi's description of the state of the banking sector when he took over accurate?
2. If yes, then we can talk about the appropriateness of Sanusi's actions, and if not, give a more accurate picture of things, backing it up with relevant facts and figures (like CAR) in which case, Sanusi's action are wrong as they were based on a faulty premise)

but you cannot keep condemning his actions when you have no idea what the accurate state of the banks were at the time he took over.

No, no, and Nooooooo
If his description had been half accurate, the CEOs, the shareholders, customers, and even bank employees would not be up in arms against him today, because most people understand the need to save the banking industry from real, and not imagined catastrophy.
In as much I would like to, I just don't have time to paste all the event s of the banking industry for the past 1 year to substantiate the above statement. The statements reside in the public domain already, and as the court cases wind their way through the legal system, more light would be shown on this financial misadvanture.

naijaking1:

No, no, and Nooooooo
If his description had been half accurate, the CEOs, the shareholders, customers, and even bank employees would not be up in arms against him today, because most people understand the need to save the banking industry from real, and not imagined catastrophy.
In as much I would like to, I just don't have time to paste all the event s of the banking industry for the past 1 year to substantiate the above statement. The statements reside in the public domain already, and as the court cases wind their way through the legal system, more light would be shown on this financial misadvanture.

Facts and figures?

Interesting your choice of witnesses to support your position
1. CEOs - that were fired for their corrupt and sharp practices, and would obviously prefer Sanusi not to intervene
2. Shareholders - that benefited (via dividends) from the doctored books of the executives 
3. The Bank employees - who lost (or fear losing) their jobs because of the clean up and would rather keep their jobs than be unemployed
Each has a selfish motive to oppose the CBN's actions. Yet, all these are not facts and figures, and do not hold water.

Example of what I mean by facts and figures:
Sanusi's reasons for the first round of intervention include

1. That last October, some banks showed liquidity strains and were 'bailed' by the CBN via the creation of the EDW
2. That as at 06/04/2009, total outstanding in EDW was N257 Billion with majority being owed by 5 banks, and as at july, they owed 90% of the EDW.
3. That 4 of 5 said banks were continously borrowing without repayment
4. The five banks had non-performing loans of 19-48% of their portfolio
5. Total portfolio of 5 banks was N2801 Billion with aggregate non-performing loans of N 1143 Billion i.e. 41%
6. The 5 banks had N456Billion marginal loans and N 487 Billion exposure to Oil &Gas.
7. The 5 banks, at may 2009, had liquidity ratios of 18-24%, which is below the regulatory minimum 25%
8. The 5 banks required N539 Billion in provisioning whcih would pull the banks below the 10% minimum CAR

If you disagree with any of the above please highlight, and provide counter evidence, otherwise , stop arguing on what you have little information on.

biina:

Facts and figures?
1. That last October, some banks showed liquidity strains and were 'bailed' by the CBN via the creation of the EDW
2. That as at 06/04/2009, total outstanding in EDW was N257 Billion with majority being owed by 5 banks, and as at july, they owed 90% of the EDW.
3. That 4 of 5 said banks were continously borrowing without repayment
4. The five banks had non-performing loans of 19-48% of their portfolio
5. Total portfolio of 5 banks was N2801 Billion with aggregate non-performing loans of N 1143 Billion i.e. 41%
6. The 5 banks had N456Billion marginal loans and N 487 Billion exposure to Oil &Gas.
7. The 5 banks, at may 2009, had liquidity ratios of 18-24%, which is below the regulatory minimum 25%
8. The 5 banks required N539 Billion in provisioning whcih would pull the banks below the 10% minimum CAR

Wonderful figures right from Sanusi's CBN office. Thank you. Exposure to EDW, non-perfoming loans(though most were by goverment), low liquidity ratios, bla, bla, blah didn't call for the knee-jerk reaction from Sanusi.
If he didn't have a preset agenda, was ignorant, or simply vindictive, he would have, like some experts have said; given a warning to the said banks, closed the EDW, forced them to increase their liquidity ratio within a specific time frame. He would have done all these without the soap opera that has characterized his show

naijaking1:

Wonderful figures right from Sanusi's CBN office. Thank you. Exposure to EDW, non-perfoming loans(though most were by goverment), low liquidity ratios, bla, bla, blah didn't call for the knee-jerk reaction from Sanusi.
If he didn't have a preset agenda, was ignorant, or simply vindictive, he would have, like some experts have said; given a warning to the said banks, closed the EDW, forced them to increase their liquidity ratio within a specific time frame. He would have done all these without the soap opera that has characterized his show

Are you disputing the figures?  If yes, please provide evidence to the contrary.
That you would trivialize the above figures (if true) and can only hinge your opinion on some 'experts' just shows you are in no position to criticize Sanusi, rather invite those 'experts' to dispute the figures.

It is hilarious your suggestions that he should give warnings (like if the banks were not aware of their actions), close EDW (wonder what happens to the money the banks owe), and force them to increase liquidity (wondering what the weapon of force will be) all the while leaving the corrupt CEOs in office and putting depositors funds at further risk. What next, we should start warning fraudsters and letting them keep their jobs?

Once again, the problem people like me have with Sanusi is simply told as a story:

Once upon a time Sanusi, a proud Kano prince came into 'the house', and when he woke up the next morning he set the whole house on fire!
When asked why, he said he saw rats and vermins that would have destroyed the whole house save for his arrival and subsequent intervention.

Granted that nobody likes a rat infested house, especially since some type rat have been actually known to destroy a whole house, Sanusi did not bother to show others these dangerous rats. While other inhabitants of this house have since suspected the presence of rats, only Sanusi saw the rats at this time.

Now that 'the house' has been burnt down, Sanusi is actually travelling around the neighborhood touting his timely intervention, and how he saved the people from living in a house that could have collapsed in the future. Any member who complaints of discomfort from not having a habitable house is reminded that the new house would be cleaner and rat-free.

But was setting the house ablaze the best option? He could have first of all shown other people the rats in question(though he wasn't mandated to do so as CBN gov., but it could have certainly helped), maybe somebody could have suggested a better way of getting rid of the rats.

Certainly, we know he could have used pussy cats to hunt down the rats, set traps, used rat poisons, and even fixed some of the damages done by the rats without resorting to the last and ultimate measure of burning down the house.

Oh, I forgot that when he was criticized for burning down the house just because of rats, he said that snakes looking for the rats were about to enter the house too, most of all he is now blaming the former occupant of that house for letting rats run around freely, and without any restriction whatsoever.

biina:

What next, we should start warning fraudsters and letting them keep their jobs?

Major difference: People, whose management style you disagree with are not fraudsters, they maybe bad managers, etc, but only a court can prove that you, me, Ibru, Sanusi, or even Akingbola is a fraudster in this country-----please don't forget that.

Also, I can see how you and Sanusi can get carried away by false interpretation of words like "fraudster"

@naijaking1
People that doctored their books are fraudsters. Being convicted of the crime makes them criminals. Else someone who robs at gun point is ot an armed robber, because he is yet to be convicted?
You are yet to provide any fact or figures to counter the CBNs publications on the state of the banks. Even Soludo admitted there were 'rats' in the house, the question was how big and how many.
I am tired of your baseless whining, as you refuse to attack the crux on the matter and would rather dance around issues and mudsling.

Sanusi is a rascal, a clever little bastard and some bolts holding his brain sitting are loose, how anyone could believe such rubbish he has been spewing is surprising.

I have said this before and I will say it again.

With a performance measurement that benchmarks the incumbent's records against some unscaled imaginary catastrophe waiting to happen save for his intervention in which whatever failures experienced in the current is assumed to be a fraction of the immaginary catastrophe that would have happened

even a bread seller in Ojuelegba can run the CBN.

If you fail you simply clame worst would have happened if you did not act.

another clear proof below that we are headed to pre-2004

why must we take one step forward, 3 steps backward. Why can't these banks be allowed to pursue businesses if they are profitable? Why should it be up to CBN to dish out what business banks can and can not go into like piecemeanl

CBN scraps universal banking, introduces new licensing regime for banks
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Written by Gbola Dan Subair

The Central Bank of Nigeria (CBN) has abolished the universal banking system in the nation’s banking industry.
Instead, each of the present universal banks will now unbundle their respective non-banking activities and obtain licence for each of them to be able to operate in the country.

Briefing newsmen at the end of the bi-monthly Bankers Committee meeting in Abuja, the Director of Banking Supervision, Chief Samuel Oni, accompanied by the chief executives of some banks, including the SkyeBank Plc, Mr Kehinde Durosinmi Eti and his Fidelity Bank Plc counterpart, Mr Reginald Ikhegai, said the Committee had decided that in the next 18-24 months all universal banks would be divested of all non- banking functions and made to strictly focus on banking functions.

Chief Oni said instead of universal banking, a bank would now be made to practice either commercial banking, mortgage banking, micro-finance banking, investment banking and not all of them being performed together by a single bank as it was currently being pracised.

For each of the activity, the CBN banking supervisor, said a new regime of licensing would take place whereby license would be obtained for each of these activities.

Apart from this, he said, there would be different category of banks such as regional bank, national bank and international bank, each with a different licensing requirements.

With this, he said, the apex bank would now be able to track down any bank that had deviated from what it was registered to engage in.

Though, he said, details of the new policy would be worked out at a meeting of the Financial Sector Surveillance Committee, which took place shortly after the Bankers Committee on Monday, Chief Oni said the capital requirements for each of the category would depend on the ability of the financial institution and the level of risks involved in such activities.

mikeansy:

I have said this before and I will say it again.

With a performance measurement that benchmarks the incumbent's records against some unscaled imaginary catastrophe waiting to happen save for his intervention in which whatever failures experienced in the current is assumed to be a fraction of the immaginary catastrophe that would have happened

even a bread seller in Ojuelegba can run the CBN.

If you fail you simply clame worst would have happened if you did not act.

are you disputing the figures presented by the CBN?

mikeansy:

another clear proof below that we are headed to pre-2004

why must we take one step forward, 3 steps backward. Why can't these banks be allowed to pursue businesses if they are profitable? Why should it be up to CBN to dish out what business banks can and can not go into like piecemeanl

I wouldnt have pegged you for one to jump to conclusions without due consideration.

pre-2004? why the choice of 2004? Hope you are not confusing Universal banking with Soludo's policies and the consolidation exercise. UB was introduced in 2001 under Joseph Sanusi.

I dont see the downside to the move. The changes by the CBN and the bankers committee only affects how you acquire licenses and does not stop a bank from doing business in as many segments as it wants. The bank simply needs to get a separate license for each segments it intends to participate in, while allowing for other banks with narrower scope of interests to meet the requirement and get licenses for those segments only. It essentially abolishes the existing 'one size fits all' and replaces it with an 'a la carte' system, which does not necessarily take off the table the silver bullet 'license'. This is different from the pre-UB system where a bank can only participate in one segment e.g. investment and not commercial.

Evidence form other countries show that there is no benefit for a 'one size fits all system' as the current setup makes it difficult for new entrants into the sector, and existing banks will simply focus on segments that favor their profitability, while segments like rural banking suffer. It is impractical to require a bank interested in financing subsistence farming to come up with N25B capitalization. Diversity is, most often than not, a good thing.

Under the new regime, one can still practice universal banking, they just need to get all the required licenses. The abolishing of UB license does not equate to the abolishing of UB.

Sanusi has cleaned the banking sector.
I think his next step is to revigourate the banks.

He'll then learn the hard way that none of the major banks and businesses in the world are clean.
I have argued this with a lot of naive minds and have decided not to bother.
Everything that happened in Naija happened in US,UK and Europe.

@biina and co
You don't seem to get it.

5 Nigerian Banks were living of the EDW.
RBS, Lehman Bros, Bearsterns,Nothern Rock(Just to name a few) where practically running of borrowed money from the interbank credit system.
Nothern Rock failed the moment it could no longer secure loans to run its day to day activities.
An Identical situation applied to Bear sterns.
RBS, HBO and Meryl linch all secretely cried distress to the government the moment they couldn't get credit.

Nigerian banks were doctoring their books.
How can you explain the fact that in Europe, UK and US, Banks which declared huge profits in one quarter immediately started declaring huge loses the immediate next quarter after they had been urged to come clean.

Banks where heavily exposed to the stock market.
Same everywhere and they all got their fingers burnt.
This is the global recession for you.
Sanusi did not understand that the Nigerian banks where part of a global financial institution.

There goes all the similarities.

No bank executives were sent to jail by government.
Government only sacked executives only after they had assumed a huge majority stake in the banks thereby executing their boardroom powers rather than some government act.
Even after the bank executives had been removed there was no law alienating the seasoned  players  from the banks as a whole. This single action of Sanusi by alienating the top Brass in Nigeria Banking sector is completely reckless and uncalled for.

The banks approached government to bailout after they had exhausted all alternatives and not the other way round as in Nigeria's case.

Sanusi actions are already causing a long term crisis of confidence in the banks.
Even today the NNPC was looking at the possibility of securing funds from foreign creditors in the event that it privatizes.

A few years back , 1 bank financed the Transcorp Nitel deal.

You are here talking about figures.
Did you ever get the details of the stress tests in the US ?
His inexposure to the bigger picture is so glaring.

I dont remember any of the bank executives in the US being accused of doctoring their books (even if they actually did). The enron executives accused of malpractices were tried.

One should not assume that the way the US or UK does things is always right. This is what happens with the approach of the US government http://www.fdic.gov/bank/individual/failed/banklist.html. Almost 200 institutions have failed since 2008 and what do you think happened to the depositors and shareholders funds? They simply covered their behinds on big banks who had enough clout and/or were too big to fail, all at the expense of public funds and smaller banks. That move should never be emulated.

You say the banks did not seek a bailout from the government, what then do you think the EDW was? They were borrowing from the CBN without repayment. If not for the EDW, those banks would have failed by the end of 2008. If that is not a bail out I wonder what is. Yet the problems only got worse because the corrupt executives remained in office and the EDW funds were just sinking into a black hole.

The law empowers the CBN to fire the executives (without having to secure a majority stake in the banks) and they did, and that was the right move IMO. Now if you feel the corrupt executives should have been left in office, then say so.

Also the CBN injected funds directly into the banks (instead of the unrestrained EDW approach) to secure the bank on the short term. That also was the right move, else they would have gone belly up under the required provisioning for bad debts.

You look at the situation before assessing the appropriateness of the actions. You cannot judge Sanusi's action in a vacuum. If you feel he acted wrongly, implies there was at least one better alternativce, which I would be glad for you to share.

biina:

I dont remember any of the bank executives in the US being accused of doctoring their books (even if they actually did). The enron executives accused of malpractices were tried.

For using the very same false, presumptive, and illegal phrase "doctoring" persistently and continously, you have exposed yourself to be a fraud who is operating from one of Sanusi's offices and reading off one of his numerous prepared speeches. You have refused to understand that nobody is guilty of any crime in any civilized society( I don't know about sharia) without trial, or confession, or conviction.

Tell the World whether Ibru, Akingbola, and others ever confessed to you and Sanusi that they "doctored" books, we all know that they have never been convicted of such. Even if you have an evidence, you should subject it to a court process, before jumping to uncivilized conclusions, name calling, and punishment without trial.

Even if you're practicing Boko Haram ideaology, you should limit it your region or state, and it must never metamorphose into a national idealogy. Bye the last time I checked Nigeria is a capitalist society with its attending privilages and problems, not some fundamentalist muslim nation.
Sanusi's premise, just like yours have been based on guilt before trial, it's wrong, wrong, and wrong

When you hear about Sanusi criticizing others for gettiing too rich you are simply reminded of Abdumuttalab who is angry that some are so rich (BTW that includes his father) before he decided to take it out on an American Plane

naijaking1:

For using the very same false, presumptive, and illegal phrase "doctoring" persistently and continously, you have exposed yourself to be a fraud who is operating from one of Sanusi's offices and reading off one of his numerous prepared speeches. You have refused to understand that nobody is guilty of any crime in any civilized society( I don't know about sharia) without trial, or confession, or conviction.

You seem clueless as to what are criminal offences  what next, a person that robs you at gun point is not an armed robber until he is found guilty in court?
There is nothing false, presumptive, or illegal in saying the executives doctored their books. Being guilty of corrupt practices is not same as being guilty of corruption.
Doctoring of books is determined by an auditor and not a judge, the same way a doctor certifies someone as being dead and not a judge. Killing someone does not equate to murder or manslaughter. I dont need a court of law to determine if you killed someone, but rather the court will determine if the killing was a criminal offence. It has been made known (and yet to be disputed) that the executive had non-performing loans that they failed to reflect on their books as required. They were declaring profits when in truth they were insolvent. That this is sufficient to prosecute them for corruption et al is a matter for the courts to determine.

Tell the World whether Ibru, Akingbola, and others ever confessed to you and Sanusi that they "doctored" books, we all know that they have never been convicted of such. Even if you have an evidence, you should subject it to a court process, before jumping to uncivilized conclusions, name calling, and punishment without trial.

One does not need the confession of the executives to determine if the books were doctored. The books can speak for themselves.
Conviction of the crime is a different issue altogether. Do not try to mix them up

Even if you're practicing Boko Haram ideaology, you should limit it your region or state, and it must never metamorphose into a national idealogy. Bye the last time I checked Nigeria is a capitalist society with its attending privilages and problems, not some fundamentalist muslim nation.
Sanusi's premise, just like yours have been based on guilt before trial, it's wrong, wrong, and wrong

Please lay off the ad hominem attacks. If you have no logical argument to present, then you should keep your hands off the keyboard.

^^^^
Your whole arguement in support of Sanusi has been crystallized into one simple theme: denial of people's basic right. Doctoring bank books in the sense you've used them here means forgery, manipulation, and fraud--- all crimes listed in our penal codes. If you, the auditor, or CBN wants to be the one who decides when, who, and how a forgery was committed, you also want to be the prosecutor who proves this allegation to the World, and finally, you want to stand there like a medival knight and render punishment as you deem fit, then the various courts in the land might as well fold up and go home.

You have either been engaged in jungle justice for too long, or your rational reasoning has been so clouded by Islamo-fascism that you don't even know what [size=18pt]innocent until proven guilty [/size] means.

And yes, an armed robber arrested with guns, blood on his hands, and even a victims wallet in his pocket is "innocent until proven guilty" in a court of law where he would then be summarily executed after he has been duly found guilty in a court of law.

This is the difference between the year 2010 and 1475, between a civilized society and a primitive society, between a graduate degree program at Yale/Harvard/Oxford vs. Khartoum, between Soludo and Sanusi, and you and me.

@naijaking1
An armed robber is an armed robber because he robs people at gun point, and the only thing that changes after he has been convicted in court is that he becomes a convicted armed robber. It is obvious you just pander the phrase 'innocent until proven guilty' (where the innocent/guiltyis wrt to the law not the truth or morality) and have little idea of the role or how the legal system works.

Its bad enough that you are convinced it is the law courts, and not auditors, that are responsible for determining if bank statements were falsified, but worse is the fact that you cannot seem to put up a coherent argument without resulting to personal comments.

I am not interested in your academic background (though your posts makes it easy to ball park), nor am I interested in your attempts to degrade the discussion to an assessment of the individual. If this is all you have to offer, it is simply pathetic, and you have my sympathy.