THE Central Bank of Nigeria (CBN) has said the banks are now stronger and can withstand any shock.
According to CBN Financial Stability Report, June 2012 made
available on its website on Thursday, the apex bank stated that the
banking system was now generally stronger, as the ratio of
non-performing loans (NPLs) to total loans declined and weak banks were
recapitalised.
The apex bank disclosed that the results of a stress test conducted
at end-June 2012 showed increasing resilience to shocks by the banking
industry, stating that the exerciser evaluated the solvency risks in
the banking industry’s balance sheet and the imbalance in the financial
system.
It noted that the ongoing banking industry reforms and the current
short-to medium-term monetary and financial policy stance of CBN would
address liquidity and exchange rate volatility concerns emerging from
the result of the test.
Speaking on the report, the Deputry Governor, Financial Sector
Stability, CBN, Dr. Kingsley Moghalu, said the report continues to
provide unique insights on developments in the nation’s financial
system and their implications for financial system stability, stating
that the highlight measures taken by the apex bank to strengthen
financial stability and is, therefore, recommended to stakeholders as a
major source of information on developments and opportunities in the
financial system.
He explained that the report also reviewed key risks in the
financial system and the efforts made by the CBN to strengthen its
soundness and stability, adding that the report would continue to
assist stakeholders to appreciate the risks inherent in the system and
facilitate informed discussion on the development and stability of the
financial system.
“CBN continued to take proactive measures aimed at improving the
resilience of the Nigerian economy to potential risks from internal and
external shocks.
“This underscores the importance of our commitment to its reforms
aimed at reinforcing the stability and soundness of the banking
system,” he stated.
During the reviewed period, CBN upgraded the Consumer Protection
Division of the Financial Policy and Regulation Department to a
full-fledged department to carry out advocacy, enlightenment, education
and promotion of awareness among consumers of financial services.
AMCON has continued to stabilise the banking system, through the
provision of liquidity by the acquisition of Eligible Bank Assets
(EBAs).
Also, the corporation made appreciable progress in recapitalising three banks.
Source- Nigeria Tribune
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