Mr. Bello Hassan, the MD/CEO of the Nigerian Deposit Insurance Corporation has outlined potential threats faced by the Nigerian economy.
He outlined the threats while Speaking at the ongoing Technical Assistance Workshop of the International Association of Deposit Insurers (IADI). Assistance Workshop in Abuja.
According to him, the potential threats at present, include the Russia-Ukraine war, cyber threats posing increasing risks to financial institutions, slow growth, increasing inflation, and tighter global financial conditions that may all exacerbate pre-existing vulnerabilities.
What MD/CEO NDIC is saying
Mr. Hassan noted that growing financial inter-connectedness has shown that a banking crisis can have contagion effects.
He said “A system-wide approach to crisis management, involving collaborative efforts of the financial safety-net participants and regional deposit insurance systems is therefore highly imperative.
He said “As a risk- minimizer, the NDIC continues to enjoy close collaboration with other safety-net participants in the financial sector, especially the CBN
He added that the workshop creates a platform for knowledge and experience-sharing, which will serve as a buffer for financial systems stability.
It also aims to ensure that Africa is prepared to weather the storm of financial crises that will emerge.
“I am optimistic that at the end of this workshop, strategies for system-wide crisis preparedness and resolution options in promoting financial stability in the region would emerge.
He revealed that the NDIC provides deposit insurance protection to depositors of 33 Deposit Money Banks (DMBs),882 Microfinance Banks (MFBs), 34 Primary Mortgage Banks (PMBs), 3 Payment Service Banks (PSBs); and 29 Mobile Money Schemes.
The 33 DMBs are made up of 24 Commercial Banks, Six Merchant Banks, and Three Non-Interest Banks (NIBs).
He also said the liquidation activities of the NDIC involved 467 insured banks, comprising 49 DMBs, 367 MFBs, and 51 PMBs at the end-December 2021.
Also speaking at the event, Mrs. Ronke Sofekun, the Board Chairman, NDIC said the stability of the global financial system is essential to economic growth, among others factors.
She noted that global economic growth has continued to weaken, as indicated by the trajectories of many macroeconomic indicators.
According to her, the NDIC has collaborated with other international standard-setters and deposit insurers to share information in order to dissect the issues in the banking industry and foster financial system stability.
She said “It is in the spirit of such collaboration that this workshop was organized so as to serve as a forum to dissect pertinent issues, share experiences, compare notes and elevate our understanding of the role of deposit insurers in Early Detection & Timely intervention; Contingency Planning & Crisis Management; Crisis Simulation to strengthen operational resilience; and Contingency Planning Framework for a safer, and more resilient financial system, that is supportive of sustainable economic growth in each jurisdiction.
“The presence of global experts from both fiscal, monetary, supervisory, and regulatory agencies, and Deposit Insurers in gathering like this, is a manifestation of our commitment towards having a robust and sustainable system that can detect problems early enough and manage crisis adequately in the banking system to foster financial system stability.” Mrs. Sokefun said.
What you should know
The workshop is being hosted by the Nigeria Deposit Insurance Corporation (NDIC) and is slated to last from September 4th through to 7th.
The workshop brings together finance experts from across the globe and is themed: “Normality in Turbulent Periods; the Stabilizing Role of Deposit Insurance“