kbdrim:

Like i said, keep running things from WASHINGTON DC , sanusi will run things from Abuja even With 2000 similar threads on nairaland there's nothing u can do abt it

Every revolution begins with expression of ideas.
By the time Nigerians are done with Sanusi, and Sanusi is done with exposing his ineptitude to Nigerians, everybody would have learnt a lesson, and the credit would go to people who exposed the truth.

@Katsumoto
I am back from the weekend in my ancestral home in remote northern Nigeria. Internet is not a priority there until they have pipe born water and electricity.
I was very angry with u for 2 reasons;

1. For the suggestion of desperation in your efforts to incite NL against  SLS - especially with the latter tactics of appealing to people's emotions by pasting his old replies to more venomous writings and distorted offending stories against his values and his immediate community.
2. I was 100% convinced that you would not have the determination to make such sustained challenges if SLS was a southerner- even if you believed there was an issue in his appointment or activity. After all with the kind of insight you demonstrated in banking and finance you must have known or suspected corruption among those CEOs . But like Soludo you looked the other way.I never meant to insult anyone.
As for Naijabebe , I like her very much and She knows it. Her literary work I commented on was actually superb ! I love the juvenilia style of Swift , certainly better than Orwell if she could sustain it. She however should chose another subject and not SLS because it will be termed and can be proved to be " Mallam bashing" - the pass time on NL.  I would suggest Bode George or Tafa Balogun or custodians of Okija shrine or Baba himself - she already has his dossier.
For the Naijabebe admirer- sorry !  Call me almajiri , call me Mallam , onye goro or anything u like I have a special attraction to her and I wil find out if she is available.
From your endless soliloquy  I gather that you were a biochemist before you got the permanent job of writing the SLS biography - I have some interest in biochemistry . Perhaps you will look up your old books and give me the ABC of it.

When on March 23, 2009
Vanguard carried a report that
anti-consolidation forces were
regrouping to reverse the gains
made by the banking industry,
many dismissed the report.
But when on
August 14,
2009, Sanusi
Lamido
Sanusi
announced
his radical
intervention
into the
banking
system by removing with fanfare
the executives of ailing banks;
many Nigerians returned to the
report and started circulating it.
The report was written before the
appointment of Sanusi Lamido
Sanusi.
Developments in the financial
sector in the last two weeks have
confirmed the veracityof the
Vanguard report. Vanguard has
nothing personal against the CBN
or its Governor but that what is
right should be done to make the
economy better for all.
If the CBN had taken Vanguard’s
report seriously, it would not have
found itself in the mess it is now as
it was gathered last week from the
usual reliable sources, that the
management of the apex bank is
looking for a way round the logjam
secretly and has started
consultations through third
parties.
Looking back, the report had said:
“Anti-consolidation forces have
regrouped with the hope of
dissembling the banks and forcing
a take-over of the top five banks in
the country, Vanguard can now
reveal.
The grand plan by the group is to
cause panic and uncertainty in the
industry and make the target
banks look unsafe for depositors.
Their aim, Vanguard gathered, is
to cause loss of public confidence
in the banking industry and compel
the Federal Government to move in
by injecting funds. Further, they
ultimately plan to instigate
government to take equity holdings
in the targeted banks.
Vanguard investigations revealed
that the group at work is made up
of former bank owners who lost
out during the consolidation
exercise, a powerful clique in the
present government, and some
aggrieved persons in three of the
six geo-political zones in the
country who felt left out in the
consolidation exercise.”
The group’s second game plan is to
make Nigerian banks look unsafe in
the eyes of the banking public.
They have perfected their game by
spreading rumour that some
categories of banks are unsound
and are on the verge of collapse.”
Two years down the line, the CBN
management has not found a
lasting solution to the Nigerian
banking crisis, rather, by its
continued inconsistencies in policy
pronouncement, the much needed
confidence in the system is
completely eroded.
By causing panic, those behind the
banking crisis have made the eight
rescued banks seem so worthless
that nobody is ready to put his
hard earned money into them. The
CBN has seems to be aiding them
by pronouncements.
The apex bank took two full pages
in the print media to show that the
eight rescued banks were
worthless and that if they did not
recapitalise by September 30, it
will be left with no choice but
liquidate them. If this is not causing
panic in the system, let someone
tell me what panic is.
Take a sample survey of the
banking public, all you will hear is
which bank is safe now? Erosion of
public confidence is the order of
the day. The CBN in an attempt to
correct its mistake has staked
uncertainty to the whole issue. It
will no longer liquidate the banks
after September 30th deadline for
recapitalisation but will
nationalise.
The CBN by it own admission had
reasoned that the option available
to it was either to withdraw the
licence of the banks and ask the
financial undertaker, NDIC, to
move in and liquidate the banks.
Both options were dropped
because of the implications for the
economy.
The CBN had told the world that
nationalising the banks would have
taken the nation back to the 1980s
when the public sector owned
substantial shares in banks and
caused distress in the system as a
result of non-performing loans.
For the CBN to now come up with
the same option it earlier told the
world or considered not feasible is
to say the least, a mark of
confusion and a sign of lack of
depth in the thinking and policy
formulation at the CBN. This is
dangerous for an economy that is
seeking transformation.
The CBN is an important arm of the
government that statements and
pronouncement from it is taken
seriously in financial and economic
circles. As it is, no serious-minded
person will take the CBN words for
it because down the line, it will
have cause to change its mind This
is what the former Minister of
State for Finance, Mr. Remi
Babalola described as ‘policy as
the spirit leads’.
Those who had backed the CBN in
its reform agenda have abandoned
it. It is simply groping in the dark
not knowing what to do with the
rescued banks, giving credence to
the fact that those who hatched
the plan may have left the CBN
leadership in the cold.
As it stands, the CBN has run out
of ideas on how to resolve the
banking crisis. All it should have
done in the first instance was to
ask the shareholders of these
banks within a given time frame to
recapitalise even if those indicted
for wrong doings were excluded
from the exercise.
The right of first refusal if given to
the shareholders would have stood
the CBN out as fair and just. The
failure to apply this principle under
the guise that banking license is a
privilege has prolonged the
resolution of the crisis.
With the lesson from Savannah
Bank license revocation still fresh
in the minds of Nigerians and the
subsequent victory of the
shareholders in court, it will be
good and better for all Nigerians
to sink their differences in this
matter and hold a stakeholders’
meeting to agree on the formula
for the recapitalisation of the
rescued banks.
The curious thing is that the
rescued banks have a combined
deposit of N3.06 trillion as at 2010
which is a source of worry to the
CBN management that should the
eight banks go under, the economy
will not be able to absorb the loss
nor is the Federal Government in
any position to pay depositors.
The Nigeria Deposit Insurance
Corporation has provision for
protecting small depositors and
can only pay a maximum of N250,
000 per depositor.
The CBN leadership should
consider resigning their
appointment for failure to resolve
the banking crisis, keep quiet and
let confidence return to the
system, or allow shareholders
recapitalise their banks instead of
the present roller coaster he is
doing with the economy.
The expectation of the ordinary
Nigerian was that after the Sanusi
tsunami, the banks will be disposed
to lending. Almost two years down
the line, the situation is worse than
when the CBN intervened in the
system. Almost all the branch
managers of banks across the
country have suddenly become risk
managers. No one is ready to
finance any project.
One of the banks’ branch
managers last week owned up to
the fact that the role of banks as
financial intermediary has been put
on hold in Nigeria in the last one
and a half years. No bank manager
is ready to stick out his neck or job
in the name of granting facility.
All projects have become risky and
as a result, projects that should
ordinarily get bank support are
brushed aside thus aggravating
the unemployment situation in the
country.

nagoma:

@Katsumoto
I am back from the weekend in my ancestral home in remote northern Nigeria. Internet is not a priority there until they have pipe born water and electricity.
I was very angry with u for 2 reasons;

1. For the suggestion of desperation in your efforts to incite NL against SLS - especially with the latter tactics of appealing to people's emotions by pasting his old replies to more venomous writings and distorted offending stories against his values and his immediate community.
2. I was 100% convinced that you would not have the determination to make such sustained challenges if SLS was a southerner- even if you believed there was an issue in his appointment or activity. After all with the kind of insight you demonstrated in banking and finance you must have known or suspected corruption among those CEOs . But like Soludo you looked the other way.I never meant to insult anyone.
As for Naijabebe , I like her very much and She knows it. Her literary work I commented on was actually superb ! I love the juvenilia style of Swift , certainly better than Orwell if she could sustain it. She however should chose another subject and not SLS because it will be termed and can be proved to be " Mallam bashing" - the pass time on NL. I would suggest Bode George or Tafa Balogun or custodians of Okija shrine or Baba himself - she already has his dossier.
For the Naijabebe admirer- sorry ! Call me almajiri , call me Mallam , onye goro or anything u like I have a special attraction to her and I wil find out if she is available.
From your endless soliloquy I gather that you were a biochemist before you got the permanent job of writing the SLS biography - I have some interest in biochemistry . Perhaps you will look up your old books and give me the ABC of it.

While not holding brief for Katsumoto, I like to disagree with your ascertion that critiscm of Sanusi is only based on his northern origin. If you had said so in 2009 when he was recently appointed and going through the senate confirmation, you might have been partially correct. But to come here and and argue that every criticsm of Sanusi more than 2 years in office is because he's a northerner is simply nonsense. His records speak for themselves, and teache a great lesson on why unqualified or mediocre people should never be saddled with vital offices no matter how much we want to reflect federal character.

Don't worry about the "corrupt" CEOs.
What about people who simply invested in our national companies, how do they fare with Sanusi in office?
How about the poor bank workers? Remember that the senior staff union yesterday said that the arrival of Sanusi has been very detrimental to their success as wokers.
Now, how about simple bank customers? As a bank customers, can you honestly say that you're having a better banking experience today than 2 years ago?
These are the parameters with which Sanusi is being judged, and not because he's a northerner. However, if he had not been a northerner, he certainly wouldn't have dreamt about the job he now has.

By Gbenga Ariyibi
ADO-EKITI— THE Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has said the introduction of Islamic banking into our financial system was “necessitated by the effect of global meltdown that castrated the Nigerian financial system and slowed down the growth of the economy.”

He, however, assured that Nigeria’s subscription to Islamic banking would revive the current downturn of the country’s economy.

Sanusi pledged to dialogue with the leadership of the Christian Association of Nigeria, CAN, this week on the issue.



The CBN governor, who was delivering a paper entitled: “Youth empowerment as a tool for sustainable development at the National Youth Service Corps, NYSC, Permanent Orientation Camp, Ise Ekiti, weekend, for the Batch B corps members, regretted that a lot of Nigerians might have been misinformed of the motive/importance of Nigeria’s subscription to the non interest banking, adding that the move has no religious coloration.

In the speech delivered on his behalf by the Controller of the CBN, Ekiti State Branch, Mr Samuel Oladele Ogungbayi, the CBN governor said Islamic banking was just a product out of many that commercial banks operate.

His words: “The non-interest banking framework was necessitated by the effect of global meltdown that castrated the Nigeria financial system and slowed down the growth of the economy.

“Given the increasing number of requests from persons, banks and other financial institutions, the CBN has developed the guidelines for the regulation and supervision of institutions that intend to offer Islamic financial services
“Islamic banking is one of the models of non-interest banking that provides financial services similar to conventional financial institutions save that it operates in accordance with the principles and rules of profit and loss sharing and the prohibition of interest charges.

Sanusi further said some of the advanced countries like Britain and America operate Islamic banking, adding that other countries like Malaysia and Indonesia have already experienced rapid growth in Islamic banking by tapping from this huge fast growing industry.

To meet with CAN leadership
Sanusi assured that he was ready to meet with Christian leaders to educate them on Nigeria’s interest in investing in Islamic banking.

The apex bank boss, however, reeled out some of the bank’s interventions in empowering the youths and the average businessman in the country, some of which according to him, include Trust Fund Model, TFM; Interest Drawback Programme, IDP; Micro Policy Framework for Nigeria and Small and Medium enterprises Finance.

He charged corps members to be more pro-active and explore any of the opportunities offered by the CBN, saying they should not rely on salaried work.


http://www.vanguardngr.com/2011/07/islamic-banking-necessitated-by-effect-of-global-meltdown-sanusi/

@ my e-stalker
Yes I saw this on a thread opened by ekt bear.

Sanusi deserves a Nobel Prize in Islamic Banking.He is now the John Maynard Keynes of our time

9ja get people o

chamber2:

Sanusi deserves a Nobel Prize in Islamic Banking.He is now the John Maynard Keynes of our time

9ja get people o

lmao

CBN Governor, Sanusi, Gave
N1.56B Loan Without Collateral
At First Bank!
Sun Aug, 30 2009
By Tobi Smith
As the ripple in the banking sector
continue to escalate, more and more
people are being caught in the
dragnet.The Times of Nigeria can
exclusively report that current
CBN Governor, Sanusi Lamido,
who is leading the effort to
recover “non-performing” loans,
gave a loan of N1.56B to
publisher of Next Newspapers,
Dele Olojede, without collateral
as the Executive Director Of First
Bank.
Olojede was said to have borrowed
the money last year when Central
Bank of Nigeria (CBN) Governor,
Lamido Sanusi, was First Bank
Executive Director in charge of risk
management.
Many of the debtors have started
repaying their loans to avoid being
put on the next list of defaulters to be
published by the EFCC.
Olojede’s headache is said to be the
fact that the EFCC is after debtors,
whether their loans are performing or
not.
EFCC Chairman, Farida Waziri,
recently told those raising eye-brows
to pay first before complaining about
the inclusion of their names on the
debtors’ list.
The EFCC disclosed last Wednesday
that it had arrested an additional 24
executives and other debtors,
bringing to 39 the number of those in
its custody.
Five bank MDs were sacked by the
CBN on August 14, in part over alleged
recklessness and financial
mismanagement, which led to a debt
profile of N1.1 trillion, given out mostly
in loans without collateral.
The MDs fired were Cecilia Ibru
(Oceanic), Erastus Akingbola
(Intercontinental), Sebastian Adigwe
(Afribank), Barth Ebong (Union), and
Okey Nwosu (Finbank).
Except Akingbola, all are being
detained by the EFCC, along with over
30 executives of the subsidiaries of
the banks.
They have all been granted bail, but
have not met the stiff conditions.
Akingbola is said to be on the run.
Others grinding their noses against
the cells of the EFCC include Samuel
Adegbite, Toyin Phillips, Sani Adams,
Bayo Dada, and Dayo Famoroti.
They also include Henry Onyemen, Niyi
Opeodo, and Peter Ololo.
Waziri disclosed last Thursday that
the EFCC has obtained a court order
to detain the suspects beyond 48
hours, because their alleged offences
are far beyond civil matters.
She urged the judiciary to refrain
from granting frivolous interlocutory
injunctions to the debtors, whom she
accused of “economic sabotage” who
would not be allowed to escape with
their loots.
Olojede was said to have initially
met Henry Imasekha last year to
help him secure the loan from a
new generation bank without
success.
“It was after then he approached
Hakeem Bello-Osagie, former
United Bank for Africa (UBA)
Chairman, who introduced him to
Sanusi,” the source recounted.
Aside the loan, it was learnt that
Bello-Osagie, Nasir el-Rufai
(former Federal Capital Terrority
Minister), and Nuhu Ribadu
(former EFCC Chairman), invested
in the newspaper.
“Our main concern now is to ensure
that First Bank’s name does not
appear on the list of banks being
owed.
“We have sent people to Olojede to
pay up before the EFCC gets wiser,”
the source added.
Link: http://
www.thetimesofnigeria.com/
Article.aspx?id=2140

Sanusi was nominated by Yar'adua (Executive representing the overall interest of Nigerians), confirmed by the senate (Legislators representing our individual senatorial constituencies). So far nobody has challenged his appointment in a Law court meaning he has the support of our Laws (Judiciary). Only for "intellectuals" to create a whole subject about Sanusi's brilliance.

Well, I will not be drawn into the debate because I know whatever the end of the debate is a reflection of US as a people.

If you go for Brilliant, we are collectively brilliant and if you eventually settle for mediocre, it means we are all mediocres as a people. The joke is not on him but on all of us.

So much for intellectualism and "book knowledge".

chamber2:

Sanusi deserves a Nobel Prize in Islamic Banking.He is now the John Maynard Keynes of our time

9ja get people o

This guy is an airbag walahi, where did this REEtARDEEN get his economics degree. He must have been tutored by Sheiks, mullars and alfa at the University.
This is a clear proof that Sanusi has become a joke of some sort. So Islamic banking is responsible for the economic successes in Indonasia and Malaysia? That's a new info that prolly only our talkative CBN Joker governor is privy to. . Lol. . I bet he wont say thesame thing for Iran and Pakistan, countries who make up to 50% of islamic banks concentration of the world. That claim is crap and a lame excuse that holds no water.
So he now agrees that the Nigerian financial system was crippled by the global financial crisis. . .haha. . This CBN joker is so full of discordant tunes and double speak but a while ago he was busy telling everyone that the bank CEO were the sole cause of the financial problem. He hounded them for authorizing loans that according to him were not properly collaterized and for being too involved at the stock market to the extent of given her staff margine loans to trade on their own shares. Yeah, yeah, yeah. . The system was corrupt but what have you done thus far? Introduction of Islamic banking? Duh, are you high on Bin Laden's excreta? What has that got to do with a cup of garri in mushin market? Like seriously there are any real practical successes of Islamic banking besides the rhetorics from its proponents.
This guy is a clueless BUM.that holds no water.
So he now agrees that the Nigerian financial system was crippled by the global financial crisis. . .haha. . This CBN joker is so full of discordant tunes and double speak but a while ago he was busy telling everyone that the bank CEO were the sole cause of the financial problem. He hounded them for authorizing loans that according to him were not properly collaterized and for being too involved at the stock market to the extent of given her staff margine loans to trade on their own shares. Yeah, yeah, yeah. . The system was corrupt but what have you done thus far? Introduction of Islamic banking? Duh, are you high on Bin Laden's excreta? What has that got to do with a cup of garri in mushin market? Like seriously there are any real practical successes of Islamic banking besides the rhetorics from its proponents.
This guy is a clueless BUM.

Akanbi_edu:

Sanusi was nominated by Yar'adua (Executive representing the overall interest of Nigerians), confirmed by the senate (Legislators representing our individual senatorial constituencies). So far nobody has challenged his appointment in a Law court meaning he has the support of our Laws (Judiciary). Only for "intellectuals" to create a whole subject about Sanusi's brilliance.

Well, I will not be drawn into the debate because I know whatever the end of the debate is a reflection of US as a people.

If you go for Brilliant, we are collectively brilliant and if you eventually settle for mediocre, it means we are all mediocres as a people. The joke is not on him but on all of us.

So much for intellectualism and "book knowledge".

hmmmmm. . . I am being tempted to call you a retardeen as well, you take seriously that charede at the senate they call screening? Guy you make me laugh. Yaradua the lame duck nominated him and so what? What has that slowpoke ever done by himself except may be die. Look my man don't get me started o. . sanusi is a big time pretender who is trying to look smart, my dear. Behind all that talkative and brawn is a man that lacks real depth, he is all macho and gusto but no real substance. That man is not even fit to lace the shoes of his predecessor let alone wear them. stop being melo-dramatic and face the issues jare. ll screening? Guy you make me laugh. Yaradua the lame duck nominated him and so what? What has that slowpoke ever done by himself except may be die. Look my man don't get me started o. . sanusi is a big time pretender who is trying to look smart, my dear. Behind all that talkative and brawn is a man that lacks real depth, he is all macho and gusto but no real substance. That man is not even fit to lace the shoes of his predecessor let alone wear them. stop being melo-dramatic and face the issues jare.

rhymz:

hmmmmm. . . I am being tempted to call you a retardeen as well, you take seriously that charede at the senate they call screening? Guy you make me laugh. Yaradua the lame duck nominated him and so what? What has that slowpoke ever done by himself except may be die. Look my man don't get me started o. . sanusi is a big time pretender who is trying to look smart, my dear. Behind all that talkative and brawn is a man that lacks real depth, he is all macho and gusto but no real substance. That man is not even fit to lace the shoes of his predecessor let alone wear them. stop being melo-dramatic and face the issues jare. ll screening? Guy you make me laugh. Yaradua the lame duck nominated him and so what? What has that slowpoke ever done by himself except may be die. Look my man don't get me started o. . sanusi is a big time pretender who is trying to look smart, my dear. Behind all that talkative and brawn is a man that lacks real depth, he is all macho and gusto but no real substance. That man is not even fit to lace the shoes of his predecessor let alone wear them. stop being melo-dramatic and face the issues jare.

You know I actually expected a response like this.

Yar'adua was rigged in

Senate screening was charade

Judiciary has been compromised blah blah blah. I don't believe IQ can be bought.

Akanbi_edu:

You know I actually expected a response like this.

Yar'adua was rigged in

Senate screening was charade

Judiciary has been compromised blah blah blah. I don't believe IQ can be bought.

No need to pretend anymore, you have just exposed yourself as a Bonafide Slow poke that is only capable of melo-drama rather than face issues raised. What do you know abt I.Q? You wont even recognize it if it kicks you in the groin, stop bandying words you can barely understand or explain jare! You remind me of that slowpoke they call aljaherem

Katsumoto:

Sanusi assured that he was ready to meet with Christian leaders to educate them on Nigeria’s interest in investing in Islamic banking.



http://www.vanguardngr.com/2011/07/islamic-banking-necessitated-by-effect-of-global-meltdown-sanusi/

Hey Mr. Sanusi! That's haughty

Akanbi_edu:

Sanusi was nominated by Yar'adua (Executive representing the overall interest of Nigerians), confirmed by the senate (Legislators representing our individual senatorial constituencies). So far nobody has challenged his appointment in a Law court meaning he has the support of our Laws (Judiciary). Only for "intellectuals" to create a whole subject about Sanusi's brilliance.

Well, I will not be drawn into the debate because I know whatever the end of the debate is a reflection of US as a people.

If you go for Brilliant, we are collectively brilliant and if you eventually settle for mediocre, it means we are all mediocres as a people. The joke is not on him but on all of us.

So much for intellectualism and "book knowledge".

Brother, let me begin to explain to you the incompetence of all the system

1. Executive Branch: while I understand the politics behind this scheme of things, late former president Yar'adua did not live to see the incompetence to the full extent of this man. The man passed on a mid year into his term as president. The only person who could act and still is able to act is the president but forgive me when I call him a weakling who cannot discern between an attempted destructive chaos from a standard issue. So that leave the issue to the Legislative branch.

2. Legislative Branch: This is the bone and structure for democracy in all democratic societies. Even while the President is a soft minded or perhaps weakling, it begs me to ponder if the whole legislative representative are mute as well. I often ask why is it that Nigerians send representatives to the upper and lower chambers of the house and senate for their own protection to look out for them, yet they act numb like everything is ok. I think it's not because they don't know what to say, they are just as clueless like the person whom they want to challenge. Take for instance, in the U.S., the house and senate has different sub-committees, but in those committees, they are very knowledgeable about the very aspect they chair.

Most of the members of the committee on Judicial ethics were lawyers and state attorney generals, committee on healthcare and social welfare are medical doctors, social workers et al, committee on budget and finance were analyst or have MBA's, worked for large corps or even chaired them, committee on foreign relations most have been on diplomatic missions at one time, they have the well known experience in that field, intelligence, most came from defense companies, authorized or signed off on defense projects et al and the list goes on. It shows that they know what they talking about.

How can a member of the Nigerian National Assembly wanna query this man when they have no clue about finance and economy? It means this man can sell junk to them and they buy it hook, line and sinker. If an intelligent person, National Assembly member (NAM)who is versed in macroeconomics will know that Sanusi has veered off course, they will summon him to explain what are his duties and steps he has taken so far to fix them. For instance issue of stress test and recapitalization, the term stress test is just a bogus word for knowing the health of the company. If a NAM knows about banking, Sanusi can better explain why some banks could and could not recapitalize. He can further explain on the guidelines of his so-called stress test and how he came to assumption, and his final recommendations. I mean I can hypothetically assume a member and ask different questions.


3. Judiciary Branch: How can the Judiciary system has his support? The judiciary are independent of the system because they interpret the laws. What I question is why has bank CEO's, support and interest groups, small, mid-size and even large businesses, associations, organizations not sued the gov. to restrict him and let the court "temporarily" grant an injunction pending an administrative judicial review. I'm sure that will frustrate him and maybe then it will be a lil late for National Assembly to step into the issue, at least, they will withhold some of his powers pursuant to certain subsections of administrative and constitutional laws (RIGHT OF THE PEOPLE) which overrides that of the CBN Gov.

Deep Sight:

I had previously on this forum indicated my view of the handling of the Bank MDs removal and the so called "bail out". . . these represented a shocking approcah to financial sector regulation and gross illegality in terms of the "bail out". . . .

Excerpts -

There are two cardinal aspects of this mess that the CBN Governor got disastrously wrong. You see, when laws, regulations and procedures are laid down, the purpose is to avert anarchy. If we continue to act with disregard for regulations, we will continue to be a disjointed and directionless society. That forms the plank for the emergence of a failed state.

The two critical bits that Sanusi got wrong: Regulatory Discretion & Procedure and Approprition of Public Funds.

If you are familiar with the Fundamentals of Regulatory Oversight in any industry, you will be aware that the cardinal function of the Regulator is to guarantee a healthy industry and in so doing, the Regulator has various tools of intervention. The tools are to be excercised progressively in such a manner that correction of anomalies is effected with minimal disruption to the system. The ultimate sanctions are only reserved for irreversible situations and even at that ONLY after the application of intermediary measures which have failed.

Sanusi did not apply any intermediary measures whatsoever before wielding the big stick and he failed to note the likely ripple effects of loss of local and international confidence and run on deposits that attend such public shows of regulatory might.

It is therefore clear that as a Regulator he acted hastily, and without discretion, which is scandalous considering that this is a post he has held for less than two months. Clear measures availed him in taking gradual steps to correct the anomalies.

Furthermore a Regulator must be impartial - and in this he has manifestly failed by implicitly giving the other banks more time to tidy up their books while dragging the first lot into the mud.

The Second major point is Appropriation of Public funds.

Under the Constitution of Nigeria ALL FUNDS - HOWEVER SOURCED, PRODUCED OR DERIVED, accrue FIRST, AND AUTOMATICALLY TO THE CONSOLIDATED FEDERATION ACCOUNT, AND NO FUNDS MAY BE WITHDRWAN THEREFROM WITHOUT APPROPRIATION FOR SUCH PURPOSE BY THE PARLIAMENT (NATIONAL ASSEMBLY).

Accordingly, once monies are printed (which is at all events a questionable approach to creating wealth) such monies accrue first to the Federation Account and must be appropriated before being touched at all.

Sanusi made two infantile arguments in his attempt to evade this. He stated that it was not an expenditure but a loan. This is irrelevant because the Constitution does not make a distinction. It states that ALL monies must be appropriated before being withdrawn. Thus it does not matter what you are withdrawing the money for: it must be appropriated before being withdrawn. Secondly he stated that the money was not from the Federation Account. What a laugh - the law states that ALL monies should go to that account!

His action sets a very dangerous precedent: In future the CBN Governor may print trillions of naira and disburse as he pleases since in his argument, its a loan. So perhaps he can print 100 trillion naira and give out as loans without the proper process of legislative approval? Also, if the other banks he is still auditing are found to need help, what will he do? Go back to his back yard and print more billions?

Aside from the illegality pointed out above, as an economist he should be aware that such reckless printing of monies is a key cause of inflationary trends within the economy.

Recall that both the US and UK effected similar bail-outs last year at the height of the recession. It may interest you to know that in both societies the actions were carried out by the Central Banks through Acts of Parliament.

So you see, my dear brother - we cannot carry on with our scattered, gra-gra approach to doing things just any how in this country.

Good one.

Nice thread Katsumoto.

Well, SLS just revoked banking licenses of Afribank, Spring Bank, and Bank PHB.

Please o. Not supporting Sanusi o. But, is this true about those banks?

From Omaojo1:

Some people don,t understand this no capital base phrase.

Acconting says ASSET=LIABILITY+OWNERS EQUITY.

Let our asset =8, liab=5 and owners equity=3.

Therefore, 8=5+3 - this is normal. it means that the owner's contributn and liabilities assumed were used to finance an asset base of 8.

In other words, 8-5=3- amount contributed by shareholders.

So if the above biz should fail, the assets can be used to settle liability claims and shareholders will still have a balance.

But in the case of these banks, A=8, l=13 and oe= -5

Then, 8=13-5- account still balances but there is a problem.

8-13=-5-there are no assets to settle liability claims. This means that a shareholder with a -5 capital is claiming to have interest in a coy.

For banks, customers deposits constitute a major part of the liabilities.

If our second biz above were a bank and it fails today, there are no enough assets to settle the liablities.

Now match the scenario above with the b/w 80 billion to 380 billion negetive reserves some of these banks have.

AjanleKoko:

Well, SLS just revoked banking licenses of Afribank, Spring Bank, and Bank PHB.

These bank have upto September 30 to recapitalize, I guess the big man just couldn't wait that long