Ensure Close Monitoring Of Regulations — CBN To Banks

Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), has urged the governors of African central banks and other financial sector regulators to be more vigilant in their regulatory and supervisory roles to forestall any run on banks in their respective jurisdictions.

According to a statement issued by CBN's acting director of communications, Isa Abdulmumin, Emefiele gave the charge yesterday at the opening of the 2023 African Central Bank Conference held at the Global Leadership Centre, Johannesburg, South Africa.

Speaking on the current global dynamics and specific policy developments in Nigeria to address emerging shocks, he advised central banks on the continent to draw lessons from the recent failure of Silicon Valley Bank (SVB) and Signature Bank in the United States of America, by putting in place regulations that will prevent any run on banks in their countries.

Emefiele, while sharing Nigeria’s experience in regulating banks, noted that the threats posed to the financial system necessitated the release of new guidelines and regulations to tackle potential infringements and, in the process, protect depositors’ funds as well as promote greater transparency in the sector.

According to him, regulators must be alive to their responsibilities by ensuring that banks under their regulatory watch are financially healthy and do not suffer a similar fate as the Silicon Valley Bank, which, until its collapse recently, catered to many of the world’s most powerful tech investors.

On Friday, March 10, banking regulators shut down Silicon Valley Bank, after the bank suffered a sudden, swift collapse, marking the second-largest in US history.

Although, two days prior, SVB signalled that it was facing a cash crunch.

It first tried to raise money by selling shares and then it tried to sell itself, but the whole thing spooked investors, and ultimately, it went down.