ola olabiy:

I shouldn't make a fool of myself? Well, let me ignore that. But, don't go down that lane again, okay?


That is not the best way to riggle yourself out of a clear mistake. You simply goofed!

Well apologies SIR, in that case it's not a "simple goof", I quoted exactly like you did so please re-quote what u said and what I said, economic downturn includes the recession period, the slump period and even some part of the recovery process.

I am not even an economist but I like to read on my own.

What I am saying is that RISK is a major aspect of CBN oversight.

In fact, the bank is there to manage risks.
Especially those posed by banks on our streets.

Those external and internal to our territory

VoodooDoll:

So, marks out of 10, where 1 is poor and 10 is good.


- Inflation rate (2009:11.1%, 2011: 13%)

- Foreign Exchange Management USD/Naira (2009: N147, 2011: N156)

- Capital formation (No data) But anecdotal evidence suggests this has worsened as banks balance sheets have taken a beating.  Next year's daily cash limit is expected to cause some concerns.

Thanks for this

ola olabiy:

May be you don't know that recession - if not well managed, leads to depreession which is worse than inflation or deflation  

Prof Ola

Mind yourself with all these pedantic talk.  

You haven't answered my question; does SLS' supposed expertise in Micro-economic Risk Management translate to expertise in Macro-economic Risk Management?

ebogentle:

@Katsumoto Please ask this question again but restrict it to financial risk only.

Is Risk Management in a Bank the same as Risk Management in a Central Bank?

manny4life:


This is my concern, why does Nigeria have to always do things differently?

Nigeria is a developing country. Our system is just evolving. NSE came into being (in 1961?) before SEC (its regulator). SEC was a committee within CBN in the 70s before it became SEC much later

Who is to midwife these critical institutions. We have an Abuja stock and commodities exchange lying fallow for years. Sanusi's argument is that if Agric contributes 40% of GDP should we not have an institution that would support it? It is difficult to fault that

Some people have blamed Sanusi for inflation, unemployment (which Philips curve is being used) and a host of other poor macro indicators. The man is just CBN governor! Yet due to perennial politicking, the fiscal side is neglected.

Until Iweala said it last week, GEJ's apologists were in denial. Soludo himself said it, but he was accused of working for Atiku
Nigeria cannot progress if it is selling crude oil for over $100 a barrel and still cannot cover recurrent budget
How will Sanusi achieve price stability when the government is just spending. We have just come out of an election, people are blaming Sanusi. Elections are officially costly without even looking at reduced output (restriction of moevement) and vote buying

BetaThings:

Banks take deposits and lend. Even if they do not do things that expose them to market risk, the simple activity of lending engaged in by Wachovia still exposes it to credit risk. Given the size of their balance sheets, it is a huge risk. Besides the interest rate risk can sum up to a tidy sum given the mismatch between assets and liabilities when applied to highly leveraged balance sheet

Yeah sure that's what the ME is all about, when they lend money out, you forget quickly that they have collateral to back up whatever was lent out or am I wrong on that part. If they did not want to limit or take or take no risk, why will they accept a tangible collateral? The size of their balance sheet does not pose any risk at all because depending on their different accounting practices, on their balance sheet, the money lent is an asset and interest income while that collateral is technically is somewhat a holding liability. The only place where I could see any form of risk is disparities between different asset class; current and non (fixed) assets. How do u mean by mismatch between assets and liabilities? You BS is supposed to equal out, please explain how u mean by that.

Katsumoto:

Prof Ola

Mind yourself with all these pedantic talk.  

You haven't answered my question; does SLS' supposed expertise in Micro-economic Risk Management translate to expertise in Macro-economic Risk Management?

Let me know if those before him had experience in macroeconomics?

Katsumoto:


Is Risk Management in a Bank the same as Risk Management in a Central Bank?

It is. Just a bit higher and broader

@gbenga77 u can't say sanusi did well . In the beginning he started well but he lost focus.i have a few questions for you. If all those sacked bank chiefs were truly guilty why is dat he has been able to only convict one? Why is he bent on selling those banks to foriegners when the shareholders want to recapitalise it ?

BetaThings:

Nigeria is a developing country. Our system is just evolving. NSE came into being (in 1961?) before SEC (its regulator). SEC was a committee within CBN in the 70s before it became SEC much later

Who is to midwife these critical institutions. We have an Abuja stock and commodities exchange lying fallow for years. Sanusi's argument is that if Agric contributes 40% of GDP should we not have an institution that would support it? It is difficult to fault that

Some people have blamed Sanusi for inflation, unemployment (which Philips curve is being used) and a host of other poor macro indicators. The man is just CBN governor! Yet due to perennial politicking, the fiscal side is neglected.

Until Iweala said it last week, GEJ's apologists were in denial. Soludo himself said it, but he was accused of working for Atiku
Nigeria cannot progress if it is selling crude oil for over $100 a barrel and still cannot cover recurrent budget
How will Sanusi achieve price stability when the government is just spending. We have just come out of an election, people are blaming Sanusi. Elections are officially costly without even looking at reduced output (restriction of moevement) and vote buying

True it is a developing nation, but for how long will it continue to be "developing nation"?

The SEC is supposed to be an independent agency just like the CBN that should be held responsible for assets and securities and should NOT be mid-wived into the CBN. The CBN already has so many functions. I know taht Nigeria cannot progress given they sell oil and still cannot cover expense. What is the govt spending on? They have price mechanism use to stable price besides, price ISN'T the only factor SLS should be worried about, there's unemployment.

@Katsumoto's extreme hard work to discredit Sanusi can't be simply for the love of Nigeria. He must be in the pay of the crooked bankers. You have a tough job discrediting a performer per excellence.

ola olabiy:

I am not even an economist but I like to read on my own.

What I am saying is that RISK is a major aspect of CBN oversight.

In fact, the bank is there to manage risks.
Especially those posed by banks on our streets.

Those external and internal to our territory

The subject of Risk Management serves political objectives. It is usually a hot subject during and just after a recession but as soon as Markets become bullish, Risk Management becomes something that is filed away. All these talk of Basel III and Dodd-Franks will go away as soon as Banks start paying huge taxes to governments and making contributions to political parties.

ola olabiy:

Let me know if those before him had experience in macroeconomics?

It is. Just a bit higher and broader

So we should maintain mediocrity just because that's always been the case? Besides, Soludo has a lot of material on macroeconomics.

Risk Management in macro-economics can not just be higher than Risk Management in a micro-economic setting. Do retail or investment banks manage inflation, unemployment, or growth? SLS would have been concerned with Bank risks related to Bank lending and bank activities.

nagoma:

@Katsumoto's extreme hard work to discredit Sanusi can't be simply for the love of Nigeria. He must be in the pay of the crooked bankers. You have a tough job discrediting a performer per excellence.

Naturally, you will come to the defense of your fellow Northerner with a personal attack rather something grounded on logic and fact. Are you a winsh? How do you know what my allegiances are?

Ola, I'm no economist but if I liken the Bank of England to CBN and if CBN's role is similar to that of BoE, I don't think risk management is part of it. Risk management simply falls on individual corporations and the value attributed to exposure to such risks in the first place. I stand to be corrected though.

bollingjoe:

@gbenga77 u can't say sanusi did well . In the beginning he started well but he lost focus.i have a few questions for you. If all those sacked bank chiefs were truly guilty why is dat he has been able to only convict one? Why is he bent on selling those banks to foriegners when the shareholders want to recapitalise it ?

It is not easy to secure convictions in Nigeria. You should know that. There are lawyers here who can kill any case with technicalities. Do you remember the newspaper ads in 2009 wherein manufacturing companies admitted that they took loans from banks to trade in the capital market?

Are you sure those people want to recapitalise? What are they waiting for? Even then you also know that CBN and other regulators want only fit and proper persons to run banks. Will you actually allow Cecilia Ibru to recapitalise Oceanic and run it again. These are issues

Katsumoto:

Besides, Soludo has a lot of material on macroeconomics.

He had material and NO SUBSTANCE.

Is that what you want?

naijababe:

Ola, I'm no economist but if I liken Bank of England to CBN and if CBN's role is similar to that of BoE, I don't think risk management is part of it. Risk management simply falls on individual corporations and the value attributed to exposure to such risks in the first place. I stand to be corrected though.

Thank you!


I have always said this, risk is decision based approach, you choose to expose yourself and has nothing to do with Macroeconomic factors.

naijababe:

Ola, I'm no economist but if I liken the Bank of England to CBN and if CBN's role is similar to that of BoE, I don't think risk management is part of it. Risk management simply falls on individual corporations and the value attributed to exposure to such risks in the first place. I stand to be corrected though.

Not so fast

http://www.economist.com/node/18867997

This from Bernanke

For example, through the provision of specific guidance and extensive examiner training, we are working to help banks strike a good balance between appropriate prudence and reasonable willingness to make loans to creditworthy borrowers.

http://www.federalreserve.gov/newsevents/speech/bernanke20100827a.htm

naijababe:

Ola, I'm no economist but if I liken the Bank of England to CBN and if CBN's role is similar to that of BoE, I don't think risk management is part of it. Risk management simply falls on individual corporations and the value attributed to exposure to such risks in the first place. I stand to be corrected though.

Please, let me know more.

ola olabiy:

He had material and NO SUBSTANCE.

Is that what you want?

You are going around in circles ola. You asked which of SLS's predecessors was exposed to macroeconomics and I answered you. What Nigerians should be striving for is the best in everything. And not stating that since the last guy was bad, its ok for the new guy to also be bad. It is a defeatist attitude and doesnt result in progress.

SLS has neither the exposure or grounding in Macro-economics. End of story.

If you argue that there isn't a Nigerian capable of Macro-economics, then that is rather sad. Maybe Nigeria should look at getting a foreigner.  

So, a bank that is responsible for setting monetary policies should not manage risks?

VoodooDoll:

So, marks out of 10, where 1 is poor and 10 is good.
- Inflation rate (2009:11.1%, 2011: 13%)
- Foreign Exchange Management USD/Naira (2009: N147, 2011: N156)
- Capital formation (No data) But anecdotal evidence suggests this has worsened as banks balance sheets have taken a beating.  Next year's daily cash limit is expected to cause some concerns.

Katsumoto:

Thanks for this

May I recommend that you provide us some data on what your dependable research estimates the inflation and exchange rates would have been, if the CBN under Sanusi had not taken decisive actions to check the excesses of a few bank executives? My guess is Inflation rates would have been closer to 20-22% and USD/NAIRA would have been more like N180.  Your sound estimates will enable us to be less inclined at classifying your analysis and Katsumoto’s thanksgiving as essentially based on ‘Voodoo economics’.

Thank you, Better Things

Why are we debating Risk Management so much? Is SLS an expert on Risk Management in a macro-economic setting?

Anyone who believes he is, should please share information to support such an assertion.

ola olabiy:

So, a bank that is responsible for setting monetary policies should not manage risks?

Who said otherwise?

ola olabiy:

Thank you, Better Things

If Risk Management was such a biggie, why the sudden need for Risk Management legislation all over the place?

Katsumoto:

You are going around in circles ola. You asked which of SLS's predecessors was exposed to macroeconomics and I answered you. What Nigerians should be striving for is the best in everything. And not stating that since the last guy was bad, its ok for the new guy to also be bad. It is a defeatist attitude and doesnt result in progress.

SLS has neither the exposure or grounding in Macro-economics. End of story.

If you argue that there isn't a Nigerian capable of Macro-economics, then that is rather sad. Maybe Nigeria should look at getting a foreigner.  

I don't understand your point, mate. What material does Soludo have on Macroeconomics?

ola olabiy:

I don't understand your point, mate. What material does Soludo have on Macroeconomics?

Did you miss reading the information provided by Deep Sight?

Deep Sight:

Charles Soludo

Academia

Dr Soludo has been visiting scholar at the International Monetary Fund, the University of Cambridge, the Brookings Institution, the University of Warwick and the University of Oxford and a visiting professor at Swarthmore College (USA). He has also worked as a consultant for a number of international organizations, including The World Bank, the United Nations Economic Commission for Africa, and the United Nations Development Programme.[1][2][3][4][5]

Soludo is a core professional in the business of macroeconomics. He obtained his three degrees and then professorship at the University of Nigeria in Nsukka, Enugu State. He graduated with a First Class Honors degree in 1984, an M.Sc. Economics in 1987, and a Ph.D. in 1989, winning prizes for the best student at all three levels.[1][5][6]

He has been trained and involved in research, teaching and auditing in such disciplines as the multi-country macro econometric modeling, techniques of computable general equilibrium modeling, survey methodology and panel data econometrics, among others. Soludo studied and taught these courses at many Universities, including Oxford, Cambridge and Warwick. He has co-authored, co-edited and authored about ten books on this subject matter.[6]

In 1998 Soludo was appointed to the position of professor of economics at the University of Nigeria; the next year he became a visiting professor at Swarthmore College in Swarthmore, Pennsylvania, US.[1]

Government

Soludo joined the federal government in 2003. Prior to his May 2004 appointment to the bank chairmanship, he held the positions of Chief Economic Adviser to former President Obasanjo and Chief Executive of the National Planning Commission of Nigeria.[1] In January 2008, in a speech to the Nigerian Economic Society, he predicted consolidation in the private banking industry, saying "By the end of 2008, there'll be fewer banks than there are today. The restructuring of the banking industry has been attracting funds from local and foreign investors, which have increased banks' ability to lend to customers".[7] He hopes to see Nigeria become Africa's financial hub,[8] and considers microfinance important to the federal government's economic policies.[9]

Publications

1992
"North-sorth macroeconomic interactions: Comparative analysis using the MULTIMOD and INTERMOD global models", Charles Chukwuma Soludo, Brookings discussion papers in international economics, Brookings Institution (1992)

1993
"Implications of alternative macroeconomic policy responses to external shocks in Africa", Charles Chukwuma Soludo, Development research papers series, United Nations Economic Commission for Africa, Socio-Economic Research and Planning Division

(1993)
"Growth performance in Africa: Further evidence on the external shocks versus domestic policy debate", Charles Chukwuma Soludo, Development research papers series, United Nations Economic Commission for Africa, Socio-Economic Research and Planning Division (1993)

1994
"The Consequences of U.S. Fiscal Actions in a Global Model with Alternative Assumptions about the Exchange Regime in Developing Countries”, Ralph C. Bryan and Charles Chukwuma Soludo. Chapter 13 in David Currie and David Vines, eds., North-South Linkages and International Macroeconomic Policy, Cambridge: Cambridge University Press for the Centre for Economic Policy Research. (Brookings Discussion Paper in International Economics No. 103. Washington, DC: Brookings Institution, February 1994.)

1995
"Macroeconomic adjustment, trade, and growth: Policy analysis using a macroeconomic model of Nigeria", Charles Chukwuma Soludo, AERC research paper, African Economic Research Consortium (1995) ISBN 9966900268 ISBN 978-9966900265

1998
Soludo, Charles Chukwuma (1998). Macroeconomic Policy Modelling of African Economies. Acena. ISBN 9782114294.

1999
"Our Continent, Our Future: African Perspectives on Structural Adjustment", T. Mkandawire and C.C. Soludo, Council for the Development of Social Science Research in Africa, Dakar, 1999, in Journal of Sustainable Development in Africa, 1:2, 1999.

2002
"African Voices on Structural Adjustment: A Companion to Our Continent, Our Future", Edited by Thandika Mkandawire and Charles C. Soludo. At least three editions: IDRC/CODESRIA/Africa World Press 2002, ISBN 0-88936-888-0, 280 pp.; Paperback, ISBN 978-0-88936-888-0 Jan 2003; Africa World Press 2003, ISBN 0865437793
Okonjo-Iweala, Ngozi; Charles Chukwuma Soludo and Mansur Muhtar (2002). The Debt Trap in Nigeria: Towards a Sustainable Debt Strategy. Africa World Press. ISBN 1592210015.

2004
"The Politics of Trade and Industrial Policy in Africa: Forced Consensus", Edited by Charles Chukwuma Soludo, Michael Osita Ogbu and Ha-Joon Chang, Africa World Press (January 2004), ISBN 159221164X, ISBN 978-1592211647 (Also International Development Research Centre, ISBN 1592211658)

2006
"Potential Impacts of the New Global Financial Architecture on Poor Countries", Edited by Charles Soludo, Musunuru Rao, ISBN 9782869781580, 80 pages, 2006, CODESRIA, Senegal, Paperback

http://en.wikipedia.org/wiki/Charles_Soludo

^^^Academia. Presentation.

You and I can write all these 'books' from our studies, mate

ndu_chucks:

May I recommend that you provide us some data on what your dependable research estimates the inflation and exchange rates would have been, if the CBN under Sanusi had not taken decisive actions to check the excesses of a few bank executives? My guess is Inflation rates would have been closer to 20-22% and USD/NAIRA would have been more like N180.  Your sound estimates will enable us to be less inclined at classifying your analysis and Katsumoto’s thanksgiving as essentially based on ‘Voodoo economics’.

Voodoo economics?

I laugh in Swahili,

Besides, based on what u said, since SLS took such decisive actions to check excesses of bank execs, inflation rate shouldn't have surpassed when he took office, I guess that's inevitable. I guess the way to salvage banks was to pump about 10% more money in circulation pushing inflation to same amount of injection.

BetaThings:

Not so fast

http://www.economist.com/node/18867997

This from Bernanke

For example, through the provision of specific guidance and extensive examiner training, we are working to help banks strike a good balance between appropriate prudence and reasonable willingness to make loans to creditworthy borrowers.

http://www.federalreserve.gov/newsevents/speech/bernanke20100827a.htm

A fall out of the financial crisis, regulation now falls under the remit of the BoE  but risk management ultimately remains up to each bank, or am i missing something?

I said, Kats, no substance  

naijababe:

A fall out of the financial crisis, regulation now falls under the remit of the BoE but risk management ultimately remains up to each bank, or am i missing something?

Hey! Naijababe. Regulation is part of risk management.

Even optimism has to be hedged let alone a country's economy.

Come on, guys.

ndu_chucks:

May I recommend that you provide us some data on what your dependable research estimates the inflation and exchange rates would have been, if the CBN under Sanusi had not taken decisive actions to check the excesses of a few bank executives? My guess is Inflation rates would have been closer to 20-22% and USD/NAIRA would have been more like N180.  Your sound estimates will enable us to be less inclined at classifying your analysis and Katsumoto’s thanksgiving as essentially based on ‘Voodoo economics’.

You are very funny. How will 5 banks failing increase the money in supply?  Money can only be increased through the actions of a Central Bank.

ola olabiy:

I said, Kats, no substance  

naijababe:

A fall out of the financial crisis, regulation now falls under the remit of the BoE  but risk management ultimately remains up to each bank, or am i missing something?

The BoE, like other institutions in the world will perform some kind of Risk Management. This is normal after each recession until greedy folks determine new ways to make money. But the main question which I think you are asking is how does regulation translate into risk management? It depends on how the regulators intend on managing that risk.

ola olabiy:

Even optimism has to be hedged let alone a country's economy.

Come on, guys.

But you are yet to tell us SLS' credentials in Macro-economics Risk Management. Telling us what obtains elsewhere does not translate to action on the CBN.

I can post 1001 links on risk management in macroeconomics