The Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido, has said that the apex bank is committed to raising the capacity of financial sector regulators to withstand any shocks to the system.
Mr Sanusi said at a workshop organized by International Association of Deposit Insurers (IADI) in conjunction with the Nigeria Deposit Insurance Corporation (NDIC) today in Abuja that all the chief executives of financial institutions and regulators in the country have seen the need to enhance the skills of operators in the banking industry and financial businesses.
“We must continue to benchmark to international best practices in the compliance to regulatory standards and principles. The Central Bank of Nigeria (CBN), in collaboration with the Nigeria Deposit Insurance Corporation (NDIC) and other stakeholders in the financial sector, have embarked on several reform initiatives to strengthen the regulatory framework of the Nigeria financial system,” Mr Sanusi.
He expressed optimism that the workshop would provide the platform for the acquisition of necessary analytical skills and tools for effective appraisal and assessment of performance indicators, adding that there were several core principles for an effective deposit insurance system that IADA member countries should pay attention to.
NDIC Managing Director, Umaru Ibrahim, had said that Nigeria was the first African country to implement the IADI assessment methodology and participants would assess NDIC’s level of compliance, pointing out that this underscored the benefit of the workshop to, among others, provide the corporation the opportunity to assess its level of compliance with the core principles as wells as serving as a tool for implementing, reviewing or actively reforming its deposit insurance system.
“The corporation being the first African country to implement the assessment mythology clearly indicates and confirms that the corporation is an important member of IADA and a key player in the Nigerian financial safety net arrangement,” he said.
The IADI assessment of the Nigerian Deposit Insurance System (DIS) is an international certification to ensure compliance to the minimum core principles and a benchmark for assessing the effectiveness of the system, to provide the basis for the establishment of a new system in countries where none exists.
Giving a background of the establishment of IADI, the NDIC boss said that it started in 2006 when the Basel Committee on Banking Supervision (BCBS) realized that an effective deposit insurance system could contribute to financial system stability.
“IADI initiated the drafting of the Core Principles in 2007, and by June 2009, collaborated with BCBS and the European Forum of Deposit Insurance (EDFI) to develop and issue the Core Principles. In December 2009, the International Monetary Fund (IMF), the World Bank, European Commission joined IADI, BCBS and EFDI to set up a steering committee, to develop a robust methodology for the assessment of compliance with the core principles. By December 2010, final assessment methodology was submitted to the Financial Stability Board (FSB), with a request to consider, among other things, the core principles in the compendium of key international standards for Sound Financial Systems,” he said.