House of Reps plan to strip CBN of its banking supervisory role

Financial analysts, economic experts, and stakeholders have faulted the recent move by the House of Representatives to strip the Central Bank of Nigeria of its supervisory powers.

Earlier, the Chairman, House of Representatives Committee on Banking and Currency, Mr. Jones Onyereri, said the house will focus on removing the CBN of playing the supervisory role this year.

Onyereri said the house will consider many alternatives, which he said might even be an independent body that will handle the job or even a new body.

In response, the experts said the move if completed may disfigure the system and work against the constitutional role for the creation of the Central Bank of Nigeria (CBN).

Counter reacting Onyereri said, the move will free CBN of the banking supervisory role and allow it to take care of monetary and currency issues.

Onyereri had said, “We are trying to take that banking supervisory function away from the CBN because if you look at it closely, especially in Nigeria, most of the problems we have in the industry has to do with supervision. For some reason, we believe that the hands of the central bank are full.

“Creating an independent body will enable the CBN to focus on its mandate of price stability and monetary policy.”

However, Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane he had suspected the move earlier, saying, “We cannot come out with a therapy without diagnosis.”

“The United Kingdom had done it and has gone full cycle. The European central bank is back to regulating the banks in Europe. However, in the United States, the office of the Controller of Currency is the one that regulates the banks. However, I am saying that today, in term of financial services regulation; I do not see that as a major problem. I think that we should focus more in making sure that monetary policy is aligned with the broad macroeconomic objectives of the country, rather than trying to cannibalise the powers of the CBN in any form,” Rewane said...BizNews