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Regulators, banks must wake-up to their duties

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Mr. Adeyemi Johnson

A Nigerian, UK based compliance professional, Mr Adeyemi Johnson, has warned that future financial crisis may devastate the nation’s financial system if regulators and operators fail to put issues bordering on compliance and enforcement on the front burner.

To achieve this objective he advocated the need for practitioners and regulators of the Nigerian banking industry to evolve a new set of principles and practices that would promote compliance and healthy habits within the sector, in line with global best practices.

Johnson, who was one of the resource persons at an international symposium for Nigerian bankers, held in Lagos by the Committee of Chief Compliance Officers of Banks (CCCOBIN) last week, said it was only through sound ethical conduct that the industry could emerge stronger from the current financial crisis to compete with its peers in other parts of the world.

He noted: “As we have seen from the global financial meltdown, there is need for a strong compliance culture for the Nigerian banking industry contrary to what we were doing in the past. Years ago we did not bother about this culture, but recent events in the global economy today are confirming that banks have learnt and are still learning lessons on the need to comply with procedures without which the industry might continue to play a second fiddle in the global arena’”

According to him, those who fail to learn from the current lessons in Nigeria and the world were merely sowing seeds for next crisis, the consequences of which may be catastrophic to bear.

Consequently, Adeyemi who was the pioneer head of legal department of GTBank UK and currently a fellow of UK Chartered Securities and Investment Institute noted that the new banking culture of his dream would be one that has valued added properties for all stakeholders in the industry. 

He argued it would be more beneficial if Nigeria would evolve a culture that emphasizes a strong culture of accountability, compliance and more importantly effective regulation and enforcement.

Adeyemi however warned that unless Nigerian regulatory authorities restructured their regulation and enforcement capabilities, they would only be building on quick sand that will collapse at very little test.

Commenting on reforms by the Central Bank of Nigeria, he stated that from his limited knowledge about what was happening in the industry at the moment, “I would say that the lack of reforms in the financial sector in the past has been responsible for the problem the country was having now. But I must also point out that there must be a time frame between when the reform kicks in and when the impact is felt across all stakeholders.”

While acknowledging the possibility of some unintended consequences from some of the CBN reform, not doing anything at all would not be an option under the circumstance, pointing out that derogatory comments about the CBN reform are not justified because the governor has to take some actions that may have some unintended consequences but they are being fine-tuned as they go along.

Source: The Sun News