The Nation Newspaper

Tag: regulators

  • Financial regulators mull capital, credit risk changes for banks

    The Basel Committee on Banking Supervision on Monday published a consultative paper on the design of a capital floor framework based on standardised, non-internal modelled approaches. The Committee also simultaneously released a consultative document on revisions to the standardised approach for credit risk.

    According to the report, the Committee’s proposed floor would ensure that the level of capital across the banking system does not fall below a certain level. The floor is also meant to mitigate model risk and measurement error stemming from internally-modelled approaches. It would also enhance the comparability of capital outcomes across banks.

    “As noted in the Committee’s November 2014 report to the G20 Leaders, the Committee is taking steps to reduce variation in capital ratios between banks. Today’s consultative paper is part of a range of policy and supervisory measures from the Committee that aim to enhance the reliability and comparability of risk-weighted capital ratios,” the Committee stated.

    The Committee is simultaneously revising the Basel framework’s standardised approaches for regulatory capital and the proposed capital floor framework will be based on the finalised versions of these standardised approaches, and would replace the existing transitional capital floor based on the Basel I framework.

    However, the floor’s calibration is outside the scope of the current consultation. The Committee will consider the calibration of the floor alongside its work on finalising the revised standardised approaches to credit risk, market risk and operational risk, taking into account its ongoing review of the capital framework and its balance of simplicity, comparability and risk sensitivity.

    The consultation is expected to continue through the first quarter of 2015.

    Under the revisions to the standardised approach for credit risk, proposed revisions seek to strengthen the existing regulatory capital standard in several ways. These included reduced reliance on external credit ratings; enhanced granularity and risk sensitivity; updated risk weight calibrations, which for purposes of this consultation are indicative risk weights and will be further informed based on the results of a quantitative impact study; more comparability with the internal ratings-based (IRB) approach with respect to the definition and treatment of similar exposures; and better clarity on the application of the standards.

    According to the Committee, it is considering replacing references to external ratings, as used in the current standardised approach, with a limited number of risk drivers that provide a meaningful differentiation for risk. These alternative risk drivers vary based on the particular type of exposure and have been selected on the basis that they are simple, intuitive, readily available and capable of explaining risk across jurisdictions.

  • Regulators, food producers battle safety certifications

    Regulators, food producers battle safety certifications

    With the rising liberalisation of agro-industrial markets and the world-wide integration of food supply chains, the assurance of food quality and safety has become a major concern. Global agro commodities buyers  need  standardised products. Local food producers are expected to meet a wide range of international safety and quality certifications to export.  Given the situation, there is a need for industry, regulators to have a common level of knowledge on   safety standards required by the importers as well as exporters. DANIEL ESSIET reports.

    Nigeria is fast emerging as a hub for fruit and vegetables. Fresh vegetables produced in Lagos are exported to markets in England and the rest of Europe.

    Other agro commodities, such as cocoa, cashew nuts, sesame seeds and soya beans are shipped daily to markets in America and the European Union.

    But the occurrence of food scares and contamination is increasingly becoming a concern for food safety. This has effects on the agro commodities export business. For this reason, many international food processing companies demand that suppliers from Nigeria and other African countries be certificated and meet international safety standards before their produce can be accepted. This is to ensure confidence in the delivery of safer food, while continuing to improve food safety throughout the supply chain.

    The certifications and standards address food, packaging, packaging materials, storage and distribution for primary producers, manufacturers and distributors.

    These include Good Agricultural Practices (GAP), Good Hygiene Practices (GHP), Good Laboratory Practices (GLP), Good Manufacturing Practices (GMP) and Good Distribution Practices (GDP).

    Consequently, regulatory frameworks and standards are being developed wherein trade and health issues are being addressed by prioritizing consumer protection over freedom of trade.

    Thus, it has become imperative for the industry and policy makers to adopt strong practices of food safety measures to remain sustainably competitive in export markets.

    The Coordinating Director, Nigeria Quarantine Service, (NIQS ), Dr Mike Nwaneri, said in the past importers of agro commodities raised concerns with officials about the quality control of exports. Subsequently, the service and the industry had a big challenge on its hands to deal with the issue thoroughly and ensure export reputation is protected, and quality is managed more thoroughly and effectively to all market destinations.

    He explained that food safety and agric health standards are designed to manage risks associated with the spread of plant and animal pests and diseases and the incidence of microbial pathogens, or contaminants in food.

    The standard for fresh fruit and vegetables is to ensure that produce is of acceptable quality, accurately labeled and that produce of unsatisfactory quality is kept off the market. To this end, he said plant quarantine check is applied to horticultural exports by inspectors at the airports, seaports, and extracting samples from a lot of produce.

    In exporting fruits and vegetables, Nwaneri said Nigeria complies as much as possible with the United Kingdom’s Food Safety Act of 1990. The testing laboratories are accredited to ISO 17025; 2000 by United Kingdom Accreditation Services (UKAS).

    On the whole, he said the responsibility for ensuring food quality and safety for agro exports rests with stakeholders in the food supply chain, saying the measure covers the whole food supply and marketing chain, from primary production to final consumption and encompass all actors in exporting and importing countries.

    To prevent a situation where agro exports are rejected abroad, he urged farmers to improve on the quality and safety of their agricultural production.

    He said efforts have been made to equip officers with knowledge on international standards of food safety and quality, thereby enabling regulators to make judicious decisions relating to food contamination.

    One of the major sources of contamination in food systems occurs during the primary production stage – which is kept out of the ambit of the government agents.

    This therefore requires an extensive campaign that encourages implementation of Good Agricultural Practices (GAP) at the farm level.

    Speaking with The Nation, the Secretary, Cocoa Association of Nigeria (CAN), Mr Alagbada Adebola said customers have raised concerns about the quality of agro exports, saying the final delivered product is failing to match the standards of what’s been promised in the original contracts.

    He said the government and organised farmers should take pro-active steps to raise food safety standards to match global standards to prevent Nigeria’s agro commodities export from being rejected abroad.

    According to him, food export consignments regularly get rejected by various import markets due to non-compliance of preset regulations.

    He explained that food producers need to make concerted efforts to win the confidence of the importers on food safety – this is rooted from the sporadic food safety related issues (food poisoning) that occur across various food categories.

    This, according to him, requires an enabling implementation environment focused on developing right infrastructure to match the dynamically changing requirements of food safety and standards.

    Besides this, he stressed the need for more awareness and promotion campaign focused on food producers to encourage adherence to food safety standards.

    The implementation of international standards of food safety is fraught with numerous challenges. There is poor general awareness towards the hazards associated with unsafe food practices and the best practices to be followed,lack of basic supporting infrastructure such as testing labs, problems in traceability of product, especially in the upstream processors of the food chain – from the farm gate to the processing unit.

    Speaking with The Nation, food safety expert, Prof Stephen Fapohunda said consumers in industrialised countries have long had concerns about certain dimensions of food safety, especially the presence of chemical residues and various contaminants in food.

    According to him, there is a need for a common platform where all stakeholders in the industry can deliberate on the various ways by which the food safety systems can be further enhanced. The aim is to ignite discussions that helps develop a sustainable road map to overcome the safety challenges in the food processing industry.

    A collaborative approach towards ensuring the food safety,he maintained is key to ensuring the growth of food businesses.

    The Country Programme Manager, Solidaridad, Mr Alex Akinbo said his organisation is training farmers to enable them to get certification for their products to increase their market access.

    He said the scope targets consistent conformity to standards requirements, which assures product safety, quality and guaranteeing competition and acceptance on international market.

  • Senate dashes hope of NPA, Shippers’ Council as technical regulators

    The Senate Committee on Marine Transport has dashed the hope of the Nigerian Ports Authority (NPA) and the Nigerian Shippers’ Council (NSC) to become the technical regulators at the nation’s sea ports.

    The bill for the creation of a Technical Regulator is at the National Assembly.

    In their efforts to facilitate trade and stop arbitrary charges by terminal operators, both the NPA and the Shippers’Council have been jostling for the juicy position of regulator at the port as the legislative body is trying to create a technical regulator that will promote the interest of importers and other port users.

    But the two agencies are unlikely to get the nod of the Senate to take the position.

    Speaking in Houston Texas, United States, the Chairman, Senate Committee on Marine Transport, Senator Zainab Kure, said the Senate would not consider the two agencies in their efforts to create a technical regulator for port operations in the country.

    Kure said the Senate is not in support of any of the two agencies to regulate the industry.

    Kure said that before the bill which will soon go through second reading would be passed, it will first go to the public for their input.

    According to her, “We are not going to take any of the existing establishments, it is going to be thrown to the public to decide and whatever they decide will stand.”

    She frowned at the fact that there is uniform process for checking arbitrariness of port charges and further noted that the earlier the technical operator is put in place, the better there would be sanity in that sec maritime industry.

    On local shipping capacity, the senator said that she was not happy that the Cabotage law has not been implemented and blamed its non- implementation on the poor economic situation of the country.

    She, however, advised the Federal Government to float a shipping line that would help in the practical training of cadets across institutions in the country.

    On the Cabotage Vessel Financing Fund (CVFF), the law maker said people were not accessing the fund.

    She advised those who have applied for the Fund, and to do so to enable her committee to take action to ensure disbursement.

    She said a letter would enable them determine whether the non-disbursement of the fund is deliberate or based on other issues. “We are going to look into it and we will be able to sought it out,” she said.

     

  • CIBN partners regulators, banks on professionalism

    CIBN partners regulators, banks on professionalism

    The Chartered Institute of Bankers of Nigeria (CIBN), is partnering with key stakeholders and institutions in the country to ensure that the Nigerian banking sector attains the highest level of professionalism.

    A statement from the Institute said it would continue to partner with the Central Bank of Nigeria (CBN), the Economic and Financial Crime Commission (EFCC) to ensure that bankers carry out their work diligently.

    The institute also said that it was partnering with Unity Bank Plc and other government and private bodies within and outside the country with a view to taking the Institute and the banking profession to greater heights.

    The President/Chairman of Council of the Institute, Mr. Segun Aina, stressed the need to partner with relevant stakeholders on capacity building and training of staff in the banking industry as well as other sectors of the economy in order to enable the country realise her millennium goals aspiration. Mr. Aina stated this during the Institute’s dialogue with key stakeholders held in Abuja.

    He encouraged EFCC, CBN and Unity Bank to engage the services of the CIBN Practice Licence holders and other well experienced professional bankers for their consultancy services, debt recovery, forensic audit, training and other services.

    He urged EFCC to support the establishment of Commercial Courts to fast-track cases involving banks and their customers as well as enforce the Dud Cheque offences Act to checkmate incidences of dud cheque crimes in banks.

     

     

     

    “EFCC should collaborate with the Institute on the enforcement of the Dud cheque Act and the Commission should ensure that banks get timely feedback on their returns to the regulatory agencies,” it added.

    While noting the Institute’s proposals, The Chairman of EFCC Mr. Ibrahim Lamorde, observed that the banking profession has improved tremendously. “The banks have done a lot in the area of know your customer (KYC) and there is need for them to also improve in other areas in other to sustain confidence in the industry”, he said.

    CBN Governor, Sanusi Lamido Sanusi, said both parties should work closely by harmonising ideas and efforts in order to ensure that the industry is not divided on approach on issues affecting it and the economy.

    “There is the need to bring in people with sound knowledge on critical financial market issues”, Sanusi said.

    On the other hand, the Managing Director/Chief Executive of Unity Bank Plc, Mr. Ado Wanka, noted that the Institute’s initiatives, especially capacity building, staff training and competency framework would go a long way in closing the gaps in the banking industry. “It will make the industry more responsive and competent for the good of the economy, said Wanka.