The Federal Ministry of Finance has expressed its full support for the ongoing banking sector reforms by the Central Bank of Nigeria (CBN) towards ensuring stability in the sector and the economy.
Finance Minister of State, Mr. Remi Babalola, made this known in Lagos at a conference organised by BusinessDay Media Limited titled “Banking Reforms in Nigeria: What Next After CBN’s Intervention”.
He disclosed that there was a superb cooperation, collaboration and support between the ministry and the CBN. “Reform is total for the financial system not just banking to ensure long run soundness and stability. We are committed to higher regulatory and supervisory standards in all segments of the financial services industry. Our overall focus is the economy,” said Babalola, who also chairs the Federation Account Allocation Committee.
The minister explained that the global economic slowdown had thrown up issues in corporate governance and the imperatives of stringent financial reporting standards, which according to him can be ignored only at the risk of the nation’s financial system and the future atrophy of the economy.
“For a nation which aspires to the league of top 20 economies by 2020, a strong and virile financial sector is imperative. We are in an unusual time that requires unusual decisions to transform our institutions, and position the economy for a rapid and sustained growth and development. Undoubtedly, the environment in which we operate is not only dynamic, but rapidly changing.
“We presently face a number of challenges in the system such as the changing risk matrix of banking operations, stiff competition amongst banks, the recent shake-up in the banking system, and stakeholder expectations including the desire of insured financial institutions for the adoption of risk-based premium assessment system. All these factors, amongst others, pose enormous challenges and will affect your decision making process,” he noted.
He stressed the importance of sound corporate governance in financial institutions.
According to him, sound governance practices help to assure that business strategies are consistent with safe and sound operations and can act as the first line of defence against excessive risk taking by financial institutions.
