maclatunji:

Of course, we are not currently similar to Greece because there is proper control from Sanusi, they say the horses at the back learn from those in the front. However, we will also be in the same crisis if we continue to allow banks to be run the way they were before Sanusi. It seems that you have forgotten that the whole world is currently in a financial mess. It is a great achievement to be stable or stagnant if you like at the moment when other economies are tumbling down. Considering the way that GEJ squandered the foreign reserves he met in office, it is great credit to Sanusi that we still have the economy the way it is at this point in time.

Please, in your brilliance are you saying that a total economic collapse as that of Greece is due to micro economic variables? If that is so, you must be practising pseudo-economics.

1.The implied responsibility of the CBN governor is to direct and drive monetary policy with the objective of growing the economy.That job is wider than controlling banks,which is just a sub-set of hie duties.The Nigerian economy is only stable because there is no activity/growth.In fact it is in a decline because we are losing jobs.You keep mention Greece,America etc DID THOSE COUNTRIES RESPOND THE WAY SANUSI DID?
All the countries that are similar to Nigeria AS REGARDS GROWTH POTENTIAL ARE THEY THEY NOT ALREADY ON THE U[WARD SWING.

Maclatunji
I don't realy think you understand the import of your own argument when you say Sanusi should be left to carry out his planned liquidation of eight banks.
Unless you fail to understand the genesis of the problems, you will never see the catastrophy that is about to be unleashed if that happens.
My question to you, is this, can you honestly argue that Sanusi's handling of the problem was the best way it could have been addressed? Are you saying it could not have been handled any better than this?
Let's face facts and leave sensationalism for now, you and I know that most part of our financial crisis was rooted in the world financial crisis that hit virtually every economy. Nigeria was no different and without denying the fact that there were unethical practices amongst bank CEOs but that was just a part of the problem. However, Sanusi highlighted that alone like that was the single cause of the problem, sensationalize issues and gave an already apprehensive public information that they did not need to know, only to erode the confidence of not just the so-called distressed banks but every Nigerian bank. Now our banks are mere deposit houses.His hasty and incorrect publishing of the names of people who were indebted to these banks only showed he was playing to the gallery and criminalizing what in financial parlance was a normal business practise. He made it seem like default on payment was a punishable offence or it was wrong for banks to have bad loans, after all, there is usually accommadation in their profit and loss balancing for such occurences. Sanusi was busy sensationalizing the whole problem and causing more havoc. Did he think he was going to be successful with making hasty policies based on his guts feelings and the tenets of his religious beliefs and morals.
Now most of those banks whose managements he single-handedly pushed out and replaced their managements are all subjects of serious litigations, who in their right senses will want to invest or buy such banks when you know court rulings could go against you after you may have invested your monies in them? Or did you think the shareholders will go down without a fight?
If he is actually confident of his reforms, why the haste to see them sold or liquidated even after promising Nigerians that no bank will be allowed to fail.
You argue that if Sanusi had not stepped in the banks would have gone under and the economy would have been thrown into some serious relapse, so what about now? Don't you think the situation is even worse now? Will thesame thing not happen if he goes ahead to liquidate those banks, do you know the multiplier effect of doing such a thing?
I ask again why did he not allow them to fail if either way they were beyond redemption like he seem to believe? Why waste tax payers money to save them only to have a re-think and do a 360 degree half-way?
Lets face it, his reforms have been retrogressive and causing more havoc. Inflation has not gone down rather it is on the increase, people have lost more jobs than would have happened if the situation was handled with professional tact. Borrowing money from the banks is almost an imposible task hence the setting up of all these industry whatever funds here and there whose flow are not as flexible and continuos like credit lines from banks. Banks have not stopped incurring bad loans as is seen from the banks that sold their bad loans to AMCON.
So what is the favour he has done for us that you keep saying, seriously, I find it annoying when people say they should liquidate them if they dont capitalize just because you have not been a victim to such policies does not meab you should sit in the comfort of your room and make such a dumb and callous statement.
And please, understand the origins of the financial crisis in Greece before making out of no where comparisons. The country was spending more than they could afford to the extent of incurring debts that were way higher than the country's economy. It had little to do with their banks' managements, it was more about their government's laxed fiscal policies and the resultant economic crisis tsunami that hit the world.
I repeat again, Sanusi is way above his head with this job as a CBN governor, he is grossly incompetent for the office. His only strength is his ability to articulate his ideas in a charismatic way that makes one overlook the usefulness of the idea itself and not the man. So far his ideas are clearly out of sync with the realities of our expectations. He is clearly not performing on his job as CBN governor but doing well in showing how good intentioned he is. I am not interested in what he believes in or his model of a good financial system if it is going to make people lose their jobs, cause more economic hardship, further harm the banks, waste public funds and yet not show any iota of progress besides stooopid rhetorics of what could have happened if he had not stepped in and go mafioso on those CEOs.

rhymz:

Maclatunji
I don't realy think you understand the import of your own argument when you say Sanusi should be left to carry out his planned liquidation of eight banks.
Unless you fail to understand the genesis of the problems, you will never see the catastrophy that is about to be unleashed if that happens.
My question to you, is this, can you honestly argue that Sanusi's handling of the problem was the best way it could have been addressed? Are you saying it could not have been handled any better than this?
Let's face facts and leave sensationalism for now, you and I know that most part of our financial crisis was rooted in the world financial crisis that hit virtually every economy. Nigeria was no different and without denying the fact that there were unethical practices amongst bank CEOs but that was just a part of the problem. However, Sanusi highlighted that alone like that was the single cause of the problem, sensationalize issues and gave an already apprehensive public information that they did not need to know, only to erode the confidence of not just the so-called distressed banks but every Nigerian bank. Now our banks are mere deposit houses.His hasty and incorrect publishing of the names of people who were indebted to these banks only showed he was playing to the gallery and criminalizing what in financial parlance was a normal business practise. He made it seem like default on payment was a punishable offence or it was wrong for banks to have bad loans, after all, there is usually accommadation in their profit and loss balancing for such occurences. Sanusi was busy sensationalizing the whole problem and causing more havoc. Did he think he was going to be successful with making hasty policies based on his guts feelings and the tenets of his religious beliefs and morals.
Now most of those banks whose managements he single-handedly pushed out and replaced their managements are all subjects of serious litigations, who in their right senses will want to invest or buy such banks when you know court rulings could go against you after you may have invested your monies in them? Or did you think the shareholders will go down without a fight?
If he is actually confident of his reforms, why the haste to see them sold or liquidated even after promising Nigerians that no bank will be allowed to fail.
You argue that if Sanusi had not stepped in the banks would have gone under and the economy would have been thrown into some serious relapse, so what about now? Don't you think the situation is even worse now? Will thesame thing not happen if he goes ahead to liquidate those banks, do you know the multiplier effect of doing such a thing?
I ask again why did he not allow them to fail if either way they were beyond redemption like he seem to believe? Why waste tax payers money to save them only to have a re-think and do a 360 degree half-way?
Lets face it, his reforms have been retrogressive and causing more havoc. Inflation has not gone down rather it is on the increase, people have lost more jobs than would have happened if the situation was handled with professional tact. Borrowing money from the banks is almost an imposible task hence the setting up of all these industry whatever funds here and there whose flow are not as flexible and continuos like credit lines from banks. Banks have not stopped incurring bad loans as is seen from the banks that sold their bad loans to AMCON.
So what is the favour he has done for us that you keep saying, seriously, I find it annoying when people say they should liquidate them if they dont capitalize just because you have not been a victim to such policies does not meab you should sit in the comfort of your room and make such a dumb and callous statement.
And please, understand the origins of the financial crisis in Greece before making out of no where comparisons. The country was spending more than they could afford to the extent of incurring debts that were way higher than the country's economy. It had little to do with their banks' managements, it was more about their government's laxed fiscal policies and the resultant economic crisis tsunami that hit the world.
I repeat again, Sanusi is way above his head with this job as a CBN governor, he is grossly incompetent for the office. His only strength is his ability to articulate his ideas in a charismatic way that makes one overlook the usefulness of the idea itself and not the man. So far his ideas are clearly out of sync with the realities of our expectations. He is clearly not performing on his job as CBN governor but doing well in showing how good intentioned he is. I am not interested in what he believes in or his model of a good financial system if it is going to make people lose their jobs, cause more economic hardship, further harm the banks, waste public funds and yet not show any iota of progress besides stooopid rhetorics of what could have happened if he had not stepped in and go mafioso on those CEOs.

Guy, the genesis of our problem is not the global financial crisis. The genesis of our problem is gross dishonesty. During Soludo's consolidation exercise, a lot of the banks committed major fraud by cooking their books. They continued to cook their books thereafter professing record profits. You should thank God for Sanusi because the whole banking industry would have collapsed if the dishonesty continued unabated,

Genius
Obviously, you are one of those that are high on Sanusi's sensationalism and policization of the financial problem. It is clear you were not following anything in the sector until superstar Sanusi started acting up and making the whole thing about himself.
For your information, our financial crisis started when the NSE crashed, I mean colapsed to the extent they had to virtually stop transactions. The cause was because institutional investors were divesting their monies from our capital market to solve their financial problems at home- US and UK. Many of them were getting "marging calls or request" from their banks and brokers as the their share values had gone down below the minimum margin requirements offered by their lenders-banks and so on.
This divestment from our capital market caused a panic and our banks who also had given margin loans to a lot of its clients started calling their clients to make more payment to shore up their minimum marging requirements on the margin loans extended to them or lose their shares. The effect of that was people selling of their shares and share values crashing down in a twinkle of an eyes. However, becaus the banking sector dominated the capital market, they took the fall and banks who had given too much margin loans to both clients and staff were worst hit.
There were also huge cases of default on payments, non-serviced loans and loans that eventually went bad as a result.
The aforementioned cases still was as a result of the economic crunch that had hit the world at that time, people defaulted on payment not because they chose to but but because they clearly could not keep up with the payment giving the economic realities. The issue of collatera was not even given any full attention before Sanusi went on to sack the managements of those banks.
The simple question which many people asked when Sanusi first started and is now haunting his administration are as follows:
• Why hurry to wield the axe, when the audit has not been conducted in all Nigerian banks to enable Sanusi gain a comprehensive picture of the situation in the industry? The weakest bank in Nigeria, Unity Bank, had not even been audited at the time. Soludo's CBN granted N70 billion to Unity the previous year before Sanusi's without sacking its CEO or management.
• The debtors' list proved to be sheer propaganda as the loans were mostly actually performing.
• Why did Sanusi not publish debts owed by government ministries, agencies and parastatals? They are actually the biggest and most notorious debtors - either directly or through contractors who handle public project. For example, Transcorp was owing Union Bank N41 billion, but the government was yet to refund the purchase price of NITEL to the company after the Federal Government reversed the privatisation of the telecom company that year. Another important group of bank debtors are the importers of petroleum products. They say the government was owing them nearly N100 billion in subsidy reimbursement. So, this means that if the government that wants to rescue the banks had fulfilled its responsibility to those it was owing, the problems of the banks would have been much lighter.
• Why did Sanusi not invite the boards of the audited banks to show them the results of the so-called audit and let them show how they think they could solve the identified problems; for example, giving them a deadline to recapitalise? The practice all over the world is to first demand that the existing shareholders meet the capital adequacy requirement. It is only where they are not able to raise the required capital that forced intervention by the regulators takes place.
Your darlin Sanusi goofed big time and he now realizes that, hence his resort to threats and force. If he had faced issues clearly from the standpoint of the causative issues he would have gotten a better understanding and probably respond well but his mafian style did not help and to thibk of it, he never had any serious blueprint for his reforms and that is why a lot of us still maintains that he is out of his league with that job.given margin loans to a lot of its clients started calling their clients to make more payment to shore up their minimum marging requirements on the margin loans extended to them or lose their shares. The effect of that was people selling of their shares and share values crashing down in a twinkle of an eyes. However, becaus the banking sector dominated the capital market, they took the fall and banks who had given too much margin loans to both clients and staff were worst hit.
There were also huge cases of default on payments, non-serviced loans and loans that eventually went bad as a result.
The aforementioned cases still was as a result of the economic crunch that had hit the world at that time, people defaulted on payment not because they chose to but but because they clearly could not keep up with the payment giving the economic realities. The issue of collatera was not even given any full attention before Sanusi went on to sack the managements of those banks.
The simple question which many people asked when Sanusi first started and is now haunting his administration are as follows:
• Why hurry to wield the axe, when the audit has not been conducted in all Nigerian banks to enable Sanusi gain a comprehensive picture of the situation in the industry? The weakest bank in Nigeria, Unity Bank, had not even been audited at the time. Soludo's CBN granted N70 billion to Unity the previous year before Sanusi's without sacking its CEO or management.
• The debtors' list proved to be sheer propaganda as the loans were mostly actually performing.
• Why did Sanusi not publish debts owed by government ministries, agencies and parastatals? They are actually the biggest and most notorious debtors - either directly or through contractors who handle public project. For example, Transcorp was owing Union Bank N41 billion, but the government was yet to refund the purchase price of NITEL to the company after the Federal Government reversed the privatisation of the telecom company that year. Another important group of bank debtors are the importers of petroleum products. They say the government was owing them nearly N100 billion in subsidy reimbursement. So, this means that if the government that wants to rescue the banks had fulfilled its responsibility to those it was owing, the problems of the banks would have been much lighter.
• Why did Sanusi not invite the boards of the audited banks to show them the results of the so-called audit and let them show how they think they could solve the identified problems; for example, giving them a deadline to recapitalise? The practice all over the world is to first demand that the existing shareholders meet the capital adequacy requirement. It is only where they are not able to raise the required capital that forced intervention by the regulators takes place.
Your darlin Sanusi goofed big time and he now realizes that, hence his resort to threats and force. If he had faced issues clearly from the standpoint of the causative issues he would have gotten a better understanding and probably respond well but his mafian style did not help and to thibk of it, he never had any serious blueprint for his reforms and that is why a lot of us still maintains that he is out of his league with that job.

^^^Bros. take it easy. I am a writer, but I am getting dizzy with these your lectures. Okay, let me read your better ideas on bank regulation in Nigeria and the economy at large.

@Rhymz, your very detailed analysis of the economy prior to Sanusi shows that I am right in linking the situation in our banks to the entire economy. I know that what miffed Sanusi was that in spite of all the challenges that you have so eloquently detailed (although your write-ups would be better if you used more paragraphs and stopped being so angry), the bank boards were still cooking the books and stealing billions. He decided that for the purpose of sanity these guys had to go and as we see they are being prosecuted by the EFCC (note that Sanusi is not in charge of this agency).

Now, we know we have major problems but at least we are reasonably sure that those that are in charge of those banks are not stealing with impunity (although it seems they can never totally stop stealing).

From your analysis I can say you are one of the "big boys" who took big risks and have been affected by some of his policies. Relax, engage the system (don't fight it), I am sure better days will come.

maclatunji:

@Rhymz, your very detailed analysis of the economy prior to Sanusi shows that I am right in linking the situation in our banks to the entire economy. I know that what miffed Sanusi was that in spite of all the challenges that you have so eloquently detailed (although your write-ups would be better if you used more paragraphs and stopped being so angry), the bank boards were still cooking the books and stealing billions. He decided that for the purpose of sanity these guys had to go and as we see they are being prosecuted by the EFCC (note that Sanusi is not in charge of this agency).

Now, we know we have major problems but at least we are reasonably sure that those that are in charge of those banks are not stealing with impunity (although it seems they can never totally stop stealing).

From your analysis I can say you are one of the "big boys" who took big risks and have been affected by some of his policies. Relax, engage the system (don't fight it), I am sure better days will come.

Sorry about the clumsiness of my write-up jare, my lappy is acting up so I use my phone. I will try to be as coherent and clear as possible with my write-up so you won't have to feel giddy. .lol
Now to the main issue, remember the circumdtances that preceeded Sanusi's emergence as CBN governor, he was prolly under a lot of pressure to prove his critics wrong. Sanusi's actions from the on-set were seriously flawed that's why he felt the need all the time to explain himself and in the process eroded the confidence people had in our banks. Imagine a CBN governor going to public fora abroad and explaining in details to a bewilderd audience how messy our financial system was? Was that for him to say? Seriously, no matter what anyone says about Soludo, I still prefer him to a thousand Sanusi. He understand the idiosyncracies of his office very well, had more progressive ideas, I qm sure he would have corrected a lot of anomalies if he had been given a 2nd term but quota system and Northern elites that felt strangled by his policies made sure he did not come back.
The next thing was to use Sanusi to politicize the problems in the sector just to make Soludo look like a fraud, they almost succeeded but with the benefits of time and hindsight people are begining to ask question they did not want to ask when they were high on Sanusi's charm and superstar show off. Let us face it, all the banks were doing thesame double-dealings and all manner of unethical practices to get the jumbo profits and ratings they were getting. Sanusi would have been better off following due process to nip it in the bud without all the uneccessary poster boy fanfare he started with.
Now he is tumbling one policy after another on their head, issuing threats and unrealistic deadlines without recourse to the owners-the shareholders of the banks. He is more interested in having things his way than face the facts that his policies are choking and need some orientation and direction, even AMCON was not his brain child, it was Soludo's. Soludo showed more understanding in his handling of the economy than our larger than life Sanusi who is just jumping from pillar to post. Now he wants to foist islanic banking on us and like he did before, he has not shown us any blueprint of how these non-interest banks will function, how they tend to add value to our economy or even the modalities for the licensing of such institutions. I hope they don't create a system that will be hijacked by terrorist group to fund terrorism in this country in the name of islam. ge of those banks are not stealing with impunity (although it seems they can never totally stop stealing).

From your analysis I can say you are one of the "big boys" who took big risks and have been affected by some of his policies. Relax, engage the system (don't fight it), I am sure better days will come.
[quote][/quote]Sorry about the clumsiness of my write-up jare, my lappy is acting up so I use my phone. I will try to be as coherent and clear as possible with my write-up so you won't have to feel giddy. .lol
Now to the main issue, remember the circumdtances that preceeded Sanusi's emergence as CBN governor, he was prolly under a lot of pressure to prove his critics wrong. Sanusi's actions from the on-set were seriously flawed that's why he felt the need all the time to explain himself and in the process eroded the confidence people had in our banks. Imagine a CBN governor going to public fora abroad and explaining in details to a bewilderd audience how messy our financial system was? Was that for him to say? Seriously, no matter what anyone says about Soludo, I still prefer him to a thousand Sanusi. He understand the idiosyncracies of his office very well, had more progressive ideas, I qm sure he would have corrected a lot of anomalies if he had been given a 2nd term but quota system and Northern elites that felt strangled by his policies made sure he did not come back.
The next thing was to use Sanusi to politicize the problems in the sector just to make Soludo look like a fraud, they almost succeeded but with the benefits of time and hindsight people are begining to ask question they did not want to ask when they were high on Sanusi's charm and superstar show off. Let us face it, all the banks were doing thesame double-dealings and all manner of unethical practices to get the jumbo profits and ratings they were getting. Sanusi would have been better off following due process to nip it in the bud without all the uneccessary poster boy fanfare he started with.
Now he is tumbling one policy after another on their head, issuing threats and unrealistic deadlines without recourse to the owners-the shareholders of the banks. He is more interested in having things his way than face the facts that his policies are choking and need some orientation and direction, even AMCON was not his brain child, it was Soludo's. Soludo showed more understanding in his handling of the economy than our larger than life Sanusi who is just jumping from pillar to post. Now he wants to foist islanic banking on us and like he did before, he has not shown us any blueprint of how these non-interest banks will function, how they tend to add value to our economy or even the modalities for the licensing of such institutions. I hope they don't create a system that will be hijacked by terrorist group to fund terrorism in this country in the name of islam.

rhymz:

Genius
•Your darlin Sanusi goofed big time and he now realizes that, hence his resort to threats and force. If he had faced issues clearly from the standpoint of the causative issues he would have gotten a better understanding and probably respond well but his mafian style did not help and to thibk of it, he never had any serious blueprint for his reforms and that is why a lot of us still maintains that he is out of his league with that job.

Ithonk i agree with you HE IS OUT OF HIS LEAGUE WITH THIS JOB.He probably is a great credit analyst but clearly not effective as an economist particularly after the performance of Soludo the yardstick for being a CBN governor has changed.