The Nation Newspaper

Tag: framework

  • IMF approves new access lending framework

    IMF approves new access lending framework

    Director of Communications at the International Monetary Fund (IMF), Gerry Rice, has said the Executive Board has approved an important reform to the Fund’s exceptional access lending framework.

    The framework also includes the removal of the systemic exemption that was introduced in 2010. He said the objective of this reform is to better calibrate IMF lending decisions to members’ debt vulnerabilities, while avoiding unnecessary costs for the members, their creditors, and the overall system. In developing the reform proposals, IMF staff conducted extensive consultations with key stakeholders, including market participants.

    “The reforms are a central component of the IMF’s work on preventing and more efficiently resolving sovereign debt crises. The IMF launched a four-pronged work program on sovereign debt restructuring in 2013. Two of the four components of this work stream have already been completed: on strengthening the contractual framework to address collective action problems (October 2014) and on reforming the IMF’s policy on the non-toleration of arrears to official creditors (December 2015),” he said.

  • Fed Govt mulls regulatory framework for fertilizer

    The Federal Government has called for the establishment of a regulatory framework to ensure that quality fertilizers are distributed to farmers.

    The government said a draft Fertilizer Bill has passed First Reading on the floor of the National Assembly.

    Deputy Director, Quality Control, Federal Ministry of Agriculture and Rural Development, Mrs. Chinyere Akudinobi, said the government considered it necessary to develop a regulatory framework for quality checks and enforcement to ensure that farmers accessed quality fertilizers.

    In her presentation at the launch of the Alliance for a Green Revolution in Africa, in Abuja, said fertilizer was needed to increase crop productivity and production.

    She said: “Nigeria’s agriculture sector has enormous potential with an opportunity to increase output by up to 160 per cent in 2030.

    “The realisation of the above potential could be achieved by policy capacity, stability, and implementation efficiency, competitive input end subsidy administration system and optimal use of fertilizers among others.

    “One of the measures to ensure quality fertilizers are distributed to farmers especially for the small scale farmers is to establish a fertilizer regulatory frame work system.”

    She said Nigerian farmers used 790, 000 metric tonnes (MT) of fertilizer annually, adding that off this,  280, 000 MT are blended locally every year while the rest are imported.

    She said:“It is in this direction that AGRA is supporting the ministry in the establishment of an efficient fertilizer regulatory system which would ensure that the right kind and quality fertilizers are sold to Nigerian farmers at prices such that while farmers achieve higher crop yields, the environment will not be negatively impacted.

    “The overall objective of the project is to increase household productivity and income through the establishment of a functional fertilizer regulatory system in Nigeria.”

  • Gas sector needs robust policy framework, says DPR

    The Department of Petroleum Resources (DPR) has said the gas sector needs robust and appropriate policy framework to enable the country harness the opportunities and benefits in its abundant gas resource.

    Its Deputy Director, Gas Monitoring and Regulation, Mr. Antigha Ekaluo who spoke in Lagos yesterday at the 2015 Business Forum and Annual General Meeting of the Nigeria Gas Association (NGA) said only a good policy could move the sector forward . The theme of this year’s Business Forum is Harnessing and monetising the potential of stranded gas fields.

    Ekaluo said effective gas sector policy will give Nigeria the ability to harness opportunities in the sector and will afford the country the opportunity to enjoy maximum value from its stranded gas resources. Nigeria, he said, is endowed with abundant gas resources and the sector holds huge potentials for unprecedented growth.

    He said: “The existing legal and regulatory framework, written primarily for oil does not provide robust technical and commercial framework for gas. There is therefore the need to pass the Petroleum Industry Bill (PIB) into law, which will underpin the ongoing sector reforms.

    The gas sector policies will provide Nigeria with the opportunity to harness and get maximum value from its stranded gas resources.”

    He said effective gas sector development remains a strong catalyst for growth of the economy. Besides, such growth will also have a multiplier effect on the Nigerian economy, he added.

    In harnessing and monetising stranded gas, Ekaluo said there is need to adopt new technologies, adding that government should also deepen market penetration, sustain demand growth and also vigorously pursue the completion of gas gathering and utilisation projects. He said there is urgent need to address gaps in regulatory and commercial frameworks across the gas value chain.

    The Chairman, Society of Petroleum Engineering (SPE), Nigeria Council, Mr. Emeka Ene said to achieve effective  strategy for monetising stranded gas, there is need to identify and secure country’s closest markets and develop an integrated flare-out model.

  • National Assembly to give dialogue legal framework

    National Assembly to give dialogue legal framework

    The National Assembly will provide the legal framework for the proposed national conference, Deputy Senate President Ike Ekweremadu said yesterday.

    He also said that there were fundamental changes that must be made in the 1999 Constitution to ensure Nigeria’s progress.

    Ekweremadu spoke when members of the Presidential Advisory Committee on National Dialogue visited the National Assembly.

    He said members of the National Assembly believed that the provision of a legal framework for the conference was their most important duty.

    The legal framework, he said, will support the outcome of the advisory committee’s job and that of the committee that will come after it.

    He said they envisaged that a national dialogue could be held, hence they proposed in the ongoing constitution amendment a possible amendment to Section 9 of the Constitution that would provide the legal basis for a possible new Constitution.

    Ekweremadu noted that the proposal for amendment of Section 9 of the Constitution became necessary “because today, what we have in our Constitution in the process of amendment, there is no such provision in this Constitution that can successfully power a new constitution”.

    For him, there must be legal basis before people could talk about sovereign national conference and referendum “so that you don’t wake up when you have a constitutional government in place and say you want a sovereign national conference; you impose the will of the people on everybody without a legal basis.”

    “We have been in the business of some constitutional reforms since the year 2000 in fact immediately after the coming into being of this particular republic,” Ekweremadu said, adding: “We had the National Assembly Joint Committee on Constitution Review which you are quite aware of.

    “We had a number of challenges culminating in 2010 when we successfully amended the constitution for the first time and we have done it two other times after that and we are now in the fourth phase of the constitution reform exercise.

    “For us during those exercises, we have come to terms with the reality of the necessity for improvement in our country.

    “Now that we have looked at the 1999 Constitution from 1999 and have tried to do some few amendments, it is therefore possible that based on our experience with the practice and exercise of the review process, there are changes that are fundamental that must be made to ensure that this country progresses normally and so that is where your job comes in.

    “My understanding from what you said is that your committee is to create a framework for this dialogue, to provide intellectual background that will enable those who will have the conversation to do something that is seamless.

    “It is not an easy job because it is difficult at this stage to determine the character of representation but that is the business of your committee, so we are not going to worry ourselves about that.

    “We believe that you will deal with that. For us in the National Assembly, I think our most important job in this whole exercise is to provide the necessary legal framework that will support whatever is the outcome of both your own committee and the committee that comes after it.

    “We envisaged, as I said earlier from the work we have done over this years that a day such as this will come. So, in the present constitutional amendment exercise, we proposed to our colleagues a possible amendment to Section 9 of the Constitution that will provide the legal basis for a possible new Constitution.

    “Because today, what we have in our Constitution in the process of amendment, there is no such provision in this Constitution that can successfully power a new constitution.

    “So, we borrowed examples of other countries that have had this kind of experience, like Zimbabwe, Kenya, Brazil, to bring into our constitution some framework that can support a possible new constitution in the future.

    “We made this proposal in the amendment process we are doing now and I will tell clearly that the Senate has passed that proposal.

    “So, we are hoping that when we meet with the House for the harmonisation that they will also support this initiative especially now that your work is in progress.

    “If that happens then most of the fears would have been addressed. Because if we said that we are a country that believes in the rule of law, we must do everything in accordance with the law and not the rule of the thumb.

    “So when we hear people talking about sovereign national conference, referendum and all that there must be a legal basis for it. So you don’t wake up when you have a constitutional government in place and say you want a sovereign national conference, you impose the will of the people on everybody without a legal basis.

    “That is absolutely very difficult. Other countries have had this type of challenge and what they did first was to provide a legal basis for what they are doing. Otherwise you are calling for anarchy.

    “So, we believe that we can all work together to make this process workable and that will help everybody at the end of the day so that whatever you are doing or whatever you would have done would not be an exercise in futility.

    “We will do our own part, we believe you will do your own part. Our prayer is that God will guide you so that whatever work you will do would help to create a better environment for our people and we do hope that we will address these issues with an open mind because I think it is important that we realize that we are better off as a country living together. It is very important.

    “Nigeria is respected all across the globe because of our size and our diversity. So, I don’t think that anything that will affect in any way the world status we enjoy today is something anybody will want to recommend.

    “So, in all these exercise, we must bear in mind that already we have particular status in the continent and of course within the global community which we need to preserve in every way possible.

    “It is very important that we realise this because we have come to live together as one country and God who put us together did not make a mistake.

    “We can make the best out of this even though you want to call it coincidence.

    “We are not the only country that is diverse in terms of population, ethnicity, language, culture and religion.

    “No, there are so many countries like that and yet they are living together. So, we can make the best out of our own circumstances.”

    Chairman of the committee, Senator Femi Okurounmu, in his remarks said that the mandate of his committee was to consult widely with all Nigerians in respect of the proposed National Conference, particularly with a view to what should be on the agenda of the conference.

    He said that the committee would also determine what issues to be tabled on the agenda, what should be the size of the proposed National Conference, what should be the duration and the duration of the conference.

    He noted that how the membership of the conference will be chosen and others were some of the critical issues on which they want to seek the views of Nigerians.

    He added that the committee would consider what should be the legal basis for the conference and the legal basis for incorporating the findings and recommendations of the conference and transmitting them into the constitution of Nigeria so they become part of the constitution.

    He said: “We have started our job of consulting with Nigerians. We have made two stops already. We have stopped over in Akure (Ondo State). We have stopped over in Jos (Plateau State).

    “Our plan is to make two stops in each of the six geopolitical zones of the country as well as the Federal Capital Territory (FCT).

    “So we are making it 13 stops on the whole. And as a very critical stakeholder in this whole enterprise, that is the National Assembly, you are one of the most powerful stakeholders in the Nigerian enterprise.

    “We feel that we must also come and consult with you. So, that is why we are here this afternoon, Mr. Deputy Senate President.”

     

  • Expert seeks legal framework for online business

    Expert seeks legal framework for online business

    The National Assembly has been called upon to make internet laws that would make online transactions admissible in courts of law in the country.

    Dr Ope Banwo, a lawyer and Chief Executive Officer of Afrinet Business Services, made the call in a chat with The Nation in Lagos recently.

    Banwo, who lamented that the country still operates archaic laws of contract that have made online business transactions not admissible in the country’s courts of law, said: “We don’t even have any law on the internet, we don’t have anti-spam laws. Legislatively, there is a very huge market there for any legislator that wants to take that up. As a lawyer, I will push for the national assembly to make laws for the internet.”

    Expatiating, he said: “If you send me an e-mail and I send you a reply as an agreement of what we do, it is not admissible in Nigerian court as at this moment as a valid contract simply because the laws of contract that we have here are still based on 1900 laws. The world has moved on but Nigeria is still stagnant.”

    He also lamented that most individuals and corporate bodies have neither been maximising their access to the internet to earn huge legitimate income nor improve their services to the consumers.

    He also hinted of plans by his company to organise an interface in collaboration with American Internet Business School between 3rd and 5th of November.

    Tagged: ‘Africa Internet Business Summit’ it is scheduled to take place at the Four Points Sheraton, Victoria Island Lagos, with participants expected from internet marketing and business solutions sub-sector across the world.

  • Regulatory framework stalls finance houses’ reforms

    Regulatory framework stalls finance houses’ reforms

    A meeting between the Central Bank of Nigeria (CBN) and top management of finance houses last week ended in a deadlock because of the latter’s regulatory framework.

    An insider at the Finance Houses Association of Nigeria (FHAN) said operators rejected the proposed framework from the CBN because it was too stringent. He said the operators thought that the botched meeting, which held in Lagos, was the last in the resolution of the regulatory logjam in the subsector, adding that the matter might be resolved at the next meeting which holds this month.

    “I am hopeful that by the time the CBN and operators meet this month, pending issues especially on regulatory framework will have been resolved,” the source said. He said the mode of capitalisation had been agreed and would be made public soon.

    The CBN had last May, given a 30-day notice to 47 finance houses closed or inactive to submit evidence of their existence and/or operations, or lose their licences. The order had expired on Tuesday, April 18, but the banking watchdog is yet to take a decision on the matter. The CBN said the affected finance companies had closed shop, ceased to operate, or abandoned finance business.

    The source said stakeholders approvals had been secured in critical areas, especially in the drive to raise the sector’s capital base from N20 million to about N100 million.

    This, he said, would ensure that only seriously minded operators were allowed to carry on the businesses of finance houses in the country.

    The source said stakeholders were expecting the reform, which is expected to be unfolded by the CBN before the end of the month. It is also expected that the restructuring would expand the funding structure of the subsector to pave the way for new investors.

    The Nation findings showed that the CBN Board of Governors would release new prudential guidelines for the subsector. Also, other policy issues, such as the appointment of Managing Directors would form part of the ongoing reforms in the subsector.

    The source said the apex bank is also considering developing a regulatory framework that will govern finance lease practice, institutionalising a “funding pool” to stimulate lending activities in the sub-sector and structured programmes to address the reputation and poor visibility challenges of the sub-sector.

    He said issues, such as withdrawal of licences of 47 finance houses whose liquidity were questioned last May, and funding for the subsector are also being looked into.

    FHAN agreed with the CBN that reforms in the sector would transform, and reposition the finance company sub-sector to enable it to play more role.

     

  • STI adopts risk framework to drive operations

    Sovereign Trust Insurance Plc is embracing enterprise risk management framework to drive its operations.

    The Managing Director/Chief Executive Officer, Mr Wale Onaolapo, said the framework is designed to assist the Board and Management to align the company’s risks to its business strategy, enhance risk response decisions, reduce operational surprises and losses, identify and manage interdepartmental risks, allow for more informed risk decisions and improve capital management.

    He said the regulatory environment has evolved with regulators seeking assurance as to the robustness of the risk management capacity and the financial viability of financial institutions in a stressed environment.

    He addded that part of the company’s policy is to maintain a strong capital base to support the growth and the development of its business and to also be able to meet regulatory capital requirements at all times through its corporate governance, processes and procedures.

    Its spokesperson, Segun Bankole, said the move became necessary to ensure that operations of the organisation are carried out on sound business principles to protect shareholders and other stakeholders’ interest.

    Head of Risk Management and Control of of the firm, Mr Sanni Oladimeji, said it has become imperative to apply sound risk management principles to ensure that organisations are safeguarded against unforeseen risks.

    He further said the company’s management is committed to the execution of the framework in the years ahead.

    He noted that the creation of a Risk Management and Control Department in the organisation has given a voice to staff. He said employees have been trained to make decisions on risks.

  • Maritime industry needs modern legal framework

    Maritime industry needs modern legal framework

    Hassan Bello was the Secretary to the Council and Legal Adviser, Nigerian Shippers Council (NSC) before his appointment as Acting Executive Secretary. In this interview with Legal Editor JOHN AUSTIN UNACHUKWU, he speaks on his plans for the NSC, multi-modal transport,port reforms and the dry ports, known as the ICDs.

    What are your programmes and plans for the year?

    Well, my programmes are in tandem with the programmes of the Federal Government and, indeed, the Federal Ministry of Transport. For us, 2013 is the year of consolidation of the maritime industry.

    What do you mean by consolidation of the industry?

    What I mean by consolidation is that we have had so many things on the drawing board, but this year, we will see the actualisation or realisation of so many far-reaching policies of the Federal Government, from revolutionising transportation, to allying the maritime industry to the economic aspirations of the Federal Government . We shall continue the ongoing port reforms, aligning the transport industry with the world economy.

    You have always maintained that multi-modal transportation is the key to unlock the treasures in our maritime industry. How far has this happened in the sector?

    We are going there now. We have seen the reactivation of the rail transport, the importance of rail transportation in global economy cannot be over-emphasised, because everybody appreciates the role of rail transport in the economy. So, the resuscitation of the rail transport system is extremely important for the economy and is a landmark development, because this is the beginning of the emergence of many other modes of transport. Multi-modalism is the reliance of many modes of transport, from water transport to Inland Water Ways. We also have the roads, the air and the rail. However, what is important is not so much multi-modalism as in the intermodalism because there must be some connectivity. There must be some interface between these modes of transport so that we have a seamless transport system. Goods transported by sea are shipped to the owner of the cargo through rail transport, road transport and so on. The co-ordination of these modes of transport is also very important. So, all these things have been done in the past two years. What the Federal Government is doing is consolidating and I am sure that 2013 will be a good one for the maritime industry.

    What is your appraisal of the role of the National Assembly in response to law making in the maritime sector?

    The National Assembly as constituted is very active in this respect. They are conscious of their roles, the Senate Committee on marine transport, the House of Representatives Committee on Marine transport have diligently worked with us closely and you need to see the quality of people and presentation that are made in those committees.

    You would recall that during the last maritime seminar for judges, the Speaker of the House of Representatives, Hon. Aminu Tambuwal, suggested a committee for Law reforms generally.

    So, what have you done along that line?

    Yes, we have been talking with the Nigerian Maritime Lawyers Association, with the House Committee on Marine transport and, very soon, we will set up a committee to look at all the laws, so that obsolete laws in the sector which hinder speedy economic development could be reformed. Such reforms would not only trigger off rapid socio-economic development, they will most importantly, assist us in the domestication of international conventions that are appropriate and relevant to the development of maritime law. Because for the maritime industry to thrive, it needs appropriate modern legal frameworks.

    Is the committee members going to examine maritime law alone? Or are they going to look at other archaic laws in our statute book?

    It will be a holistic approach and more practical. For instance, we cannot domesticate a convention if it does not have any meaning. We cannot promulgate laws that do not translate into economic advancement of our people. Laws must be relevant; most importantly, they must guarantee the economic advancement of our people.

    We have to have laws that will boost economic activities, facilitate the integration of Nigeria into world economy and we must have laws that are meaningful, and applicable to our peculiar situation.

    What is the role of the Nigerian Law Reform Commission in this?

    There are so many agents of change of which the Nigerian law Reform Commission is one of them. The law Reform Commission is an omnibus commission, it has been very active if you have been following their activities, what we will do is to liase with them, because they may have their specialties such as criminal laws, constitutional laws e.t.c but admiralty law is a specialised aspect of the law which is also intricate. So, that committee of the Nigerian Shippers Council, Nigerian Maritime Lawyers Association and the National Assembly Committee on Marine Transport would, at one point or the other, rely on the Nigerian Law Reform Commission to effectively discharge their mandate.

    What is your appraisal of the Dry ports, known as ICDs.

    They are very strategic infrastructure, the dry ports are supposed to solve the lingering crises of ports congestion. They are long term solution to ports congestion because cut off the dwell time of cargo at the sea ports. The dry ports are also ports; the only thing is that you don’t see water. Otherwise they are supposed to be designated legally as the ports of destination and origin and that is being done right now. The moment we have such designations and such regulations branding them as ports of destination or origin as the case may be, then they will come to the fire. The concept of the dry ports is also a modern concept because it supports the door to door delivery of cargo. It is also one of the ingredients of the modern carriage conventions, the United Nations carriage of goods wholly or partly by sea, otherwise known as the Rotterdam Rules. Nigeria has not only done supporting legislations, but is also providing the real infrastructure to support modern transport system and the potential for dry port are so enormous that when they come to fruition which we hope will be very soon, it will be so visible and we have to look at their employment content. They will employ so many people.

    Is that all the dry ports can do?

    The most underlying use of the dry ports is their export potential, they should be a place for consolidation of cargo, for group page of cargo and for export of cargo. A place for it is a place for evacuation of all our exports, not only imports if they are well managed.

    Who is responsible for their management?

    The concessionaries carry enormous responsibilities here because it was done on a PPP basis. Hitherto, they have been carried along, however, I think their problems are financial problems and now, it is time for the concessionaries to be alive to their responsibilities. The Shippers council will also be alive to its own responsibilities, because we can’t have white elephant projects. These dry ports are very important and we must work together to see that they become operational.

    We have read of port reforms and efforts to ensure 24-hour operation of the ports. What is the role of the NSC in these reforms.

    Yes, many things are happening along that line. That is why I said 2013 is the year of consideration. It is the year of actualisation, 24-hour ports operation would bring a lot of growth to the economy. Apart from speedy cargo clearance, because it will bring the ports alive within these 24 hours, the Customs playing their role 24 hours, the clearing system being electronic. Even the traffic in the ports and ports areas would be affected. The single window system, a lot of responsibility for freight forwarders and the NSC in particular, the Shippers Council has always advocated this, because if we have more hours in operation, you have quick clearance of cargo. You won’t have much port congestions. You will have shorter dwell time for cargo, turnaround time for ships and our port will become more competitive because you cannot decree a port to be (a hub of ) a port of priority by importers. It is a function of competition and operations, if we have 24 hours clearing operations, then that will make our ports have the potential of making the best in the whole west African sub-region.

    A 24-hour port operations is on the way. It is workable. It is doable and I am sure that if everyone is alive to his responsibilities, this will be realised very soon.

    To what use have you put the benefits of the 2012 maritime seminar for judges.

    The Maritime Seminar for Judges in 2011 was a watershed in the sense that the seminar is moving towards the economic aspect of the maritime industry.

    What do mean by this?

    Yes, we brought in big time shippers, such as Alhaji Aliko Dangote. We brought in big time maritime lawyers on the issue of ship arrest. We had ship owners who came and talked about the danger of frivolous arrest of ships. We had judges and so on.

    But we have the committee for maritime seminar for Judges, which over sees the realisation of the communiqué, so that the seminar is not just a talk shop, but remains a policy driving seminar and right now, it is working to see that the communiqué is realised as soon as its is possible.

     

  • Framework to protect insured coming, says commissioner

    Framework to protect insured coming, says commissioner

    The National Insurance Commission (NAICOM) is taking steps to reposition the industry to protect policy holders and serve the low-income earners, the Commissioner of Insurance, Fola Daniel, has said.

    Speaking at a forum in Lagos, Daniel said the commission has reviewed the industry’s claims management process which culminated in the development of a draft framework.

    “The framework when operational will enthrone robust insurance consumer/policy holder’s protection, fair treatment of customers, transparency and disclosures”, he said.

    According to the Commissioner, this will go a long way in improving public confidence in insurance.

    He said the steering committee that would facilitate micro-insurance development in the country will include all the stakeholders such as regulator, the Nigeria Insurers Association (NIA), NCRIB, Corporative societies, micro finance institutions as well as non-government organisations.

    Daniel also added that collaboration will also take place under the auspices of the national financial inclusion strategy that was introduced recently by the Federal Government.

    He said,”the process for the appointment of a national micro –insurance coordinator to drive for financial inclusion using micro-insurance is ongoing. The expert will transfer knowledge and will coordinate all the partnership between all the stakeholders in micro insurance value chain.”

    According to the Commissioner, the development of a reliable micro insurance framework is moving close to completion. He said the framework will provide clear rules for the would-be operator and proactive micro insurance consumer protection requirements.

    In recognition of the peculiar nature of micro insurance, the Commissioner said that the framework would be simply supervisory, reporting, underwriting and licensing processes and identification of certain incentives for micro insurance model selection, fees and commission level for intermediaries.

    He said: “We shall ensure that the rules are flexible and are designed in such a way that encourages new and innovative products that relate to the needs of the small and medium enterprises and at affordable cost.”

    According to NAICOM Boss, an effective micro insurance distribution channel is a major concern. The issue, he added could not be overemphasize considering the fact that micro insurance cannot be effectively accessed using the conventional intermediaries such as the brokers and agents.

    He said there are a variety of alternative intermediaries and channels that that can be involved in micro insurance distribution. The distribution network appears to be highly concentrated in a few cities with a focus on corporate accounts and mandatory insurance using alternative channels and distributors that already have links with the uninsured in rural and urban areas is vital for sustaining development of micro insurance while offering value and convenience to clients,” he added.

  • CBN to implement New Capital Accord framework by year-end

    CBN to implement New Capital Accord framework by year-end

    The Central Bank of Nigeria (CBN) has expressed its readiness to execute a framework on New Capital Accord (Basel II) before year end, The Nation has learnt.

    The CBN Deputy Governor, Financial Systems Stability, Kingsley Moghalu, confirmed this during a conference for bank directors organised by the Financial Institutions Training Centre (FITC) in Lagos.

    He said there would be full adoption of the International Financial Reporting Standards (IFRS) by banks in same period, adding that both principles would enhance transparency and additional disclosures in banks’ financial reporting.

    Consultant to the CBN on Basel II and IFRS Implementation Project, Gianfranco Antonio Vento,said there was need for banks to assess their capital adequacy positions relative to their overall risks. He called for regulators to review and take appropriate actions in response to those assessments.

    Vento explained that the Basel standard was meant to ensure that a bank maintains an adequate level of unencumbered, high-quality liquid assets that can be converted into cash to meet its liquidity needs for a 30 calendar day under a significantly severe liquidity stress scenario specified by supervisors.

    At a minimum, the stock of liquid assets should enable the bank to survive until Day 30 of the stress scenario, by which time it is assumed that appropriate corrective actions can be taken by management and/or supervisors, and/or the bank can be resolved in an orderly way.

    He said local banks are already meeting with the CBN staff involved in regulation and supervision of the Basel project while administration of a questionnaire to the lenders is ongoing. It was also leant that individual meetings with the banks and collection of all the additional information necessary for the implementation was also on course.

    Vento said the result has been the Baseline Survey to highlight the state-of-the-art in the implementation process of Basel II and III in the banking sector, to enhance the implementation as well as the following stages for an effective introduction of the new regulatory framework.

    Banks are also involved in the preparation of a Quantitative Impact Study (QIS) and a comprehensive and detailed regulatory framework meant to clarify and adapt the Basel II and III principles to the local context.

    “Preparation and review of gap analyses that banks will perform in order to point out their distances from the minimum regulatory standards to be implemented as well as progressive implementation of Basel II and III rules, with a parallel running period in which the existing rules will cohabit with the new framework,” he said.

    He said banks, which have developed internal models and are able to meet the minimum standards fixed in the new Basel II and III regulatory framework, will be allowed to apply for the validation of their models.

    Vento explained that there was need to encourage market discipline by developing a set of disclosure requirements that allow market participants to assess key information about a bank’s risk profile and level of capitalisation.

    “By bringing greater market discipline to bear through enhanced disclosures, the Basel capital framework can produce significant benefits in helping banks and supervisors to manage risk and improve stability,” he said.