CBN MPC Meeting on September 1, 2009 becomes crucial
Further to our publication of ‘THE BULL IN THE CHINA SHOP – A state of the financial market report’ , It appears that the monetary authorities are now backing out of making further dramatic reforms. It is now claimed that the 5 banks were the worst in our banking firmament comprising 90% of the systemic risks. This claim obviously excludes Unity Bank, Wema Bank, Sterling Bank, and more. Even Spring bank that PHB is struggling with is deemed not to have any problems (sic)!
Some excepts from the Standard Chartered report:
- With the greatest risks to Nigeria’s banking system now largely identified, ring-fenced, and subject to recapitalisation, and with the change of management at the troubled banks, it is debatable whether the directive suspending the use of CP and BAs as off-balance-sheet items needs to remain in place much longer. The formal investigation by special examiners into all banks in Nigeria is due for completion by mid-September. Why laim that the complete examination of all banks would be done in September and yet argue that nothing more would be found in the remaining 11? So in effect, we are just going through the motion with the other 11 banks whose management has been very honest in giving a true & fair account of their dealings and had not played any of the games which the 5 were alleged to have played? Even Unity bank that has not produced an annual report in how many years is not one of the worst, heh?
- Even taking into account increased money supply to accommodate the banking-sector recapitalisation in the short term, broad money growth is likely to continue to disappoint. Fears of an inflationary surge would therefore be misplaced. If anything, expectations of further measures to boost liquidity at the CBN’s MPC meeting on 1 September may well start to intensify.
Kindly download this report from Standard Chartered titled – NIGERIA: PAYING FOR THE BANK BAILOUT on our website here..
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