E-Financial
New Rules to Ban Bailout for ‘Too Big to Fail’ Banks
New global rules to prevent banks that are “too big to fail” from being bailed out by taxpayers have been proposed, according to BBC.
The rules, created by the Financial Stability Board (FSB), a global regulator, will require big banks to hold much more money against losses. Mark Carney, FSB chairman and governor of the Bank of England, said the plans were a “watershed” moment.
BBC quoted him as saying that it had been “totally unfair” for taxpayers to bail out banks after the financial crisis of 2008 and 2009.
“The banks and their shareholders and their creditors got the benefit when things went well,” he told the BBC.
“But when they went wrong the British public and subsequent generations picked up the bill – and that’s going to end”.
Mr Carney explained that the new system would ensure that bank shareholders, and lenders to banks such as bondholders, would become first in line to bear the brunt of future losses if banks could not pay out of their own resources.
“Instead of having the public, governments, [and] the taxpayer rescue banks when things go wrong; the creditors of banks, the big institutions that hold the banks’ debt – not the depositors – will become the new shareholders of banks if banks make mistakes.”
“Let’s face it, the system we’ve had up until now has been totally unfair,” he added.
At its peak in the UK alone, taxpayers’ direct subsidy to banks stood at more than £1 trillion according to a recent report from the National Audit Office.
In the wake of the financial crisis, world leaders asked the FSB to come up with proposals to prevent similar bailouts from happening in the future.
The proposed new rules, which are up for consultation and should take effect in 2019, require “global systemically important banks” to hold a minimum amount of cash to ensure they will be able to survive big losses without turning to governments for help.
The capital set aside should be worth 15-20% of the bank’s assets, the FSB said. That is a far bigger cushion against losses than is required by current banking rules.
RBS sign The UK government still owns an 80% stake in Royal Bank of Scotland
The FSB hopes this stronger policy will prevent taxpayers from being forced to pay billions of pounds again to stop big banks from collapsing, in the event of another financial crisis.
Anthony Browne of the British Bankers’ Association welcomed the proposals.
“The banking industry strongly supports this work, which is a really important step in ending ‘too big to fail’ and ensuring that never again will taxpayers have to step in to bail out banks,” he said.
“We agree with the aims and objectives of the proposals for total loss absorbing capacity (‘TLAC’), that there should be sufficient resources available to absorb losses in the event of bank failure and provide new capital to ensure critical economic functions can continue to be provided,” he added.
Less disruption
“Agreement on proposals for a common international standard on total loss-absorbing capacity for [big banks] is a watershed in ending ‘too big to fail’ for banks,” said Mr Carney.
“Once implemented, these agreements will play important roles in enabling globally systemic banks to be resolved without recourse to public subsidy and without disruption to the wider financial system.”
According to the BBC’s business editor Kamal Ahmed, analysts estimate the new capital requirements could cost €200bn (£157bn) for Europe’s banks alone, with the cost for globally significant banks in the US, Japan and China likely to be much higher.
The FSB has published a list of 30 banks it regards as “systemically important”, meaning their collapse could have a wider impact on global financial systems.
In the UK, the banks are Barclays, Standard Chartered, HSBC and the Royal Bank of Scotland.
Lloyds Banking Group has been removed from the list as its potential impact on financial systems has declined in recent years.
The UK government spent around £65bn directly bailing out RBS and Lloyds during the crisis. The government still owns an 80% stake in RBS and 25% of Lloyds.
Analysis: Andrew Walker, economics correspondent, BBC News.
Lehman Brothers was the classic case of a financial institution that was too big to fail – or at least it probably was according to the previous Federal Reserve chairman Ben Bernanke.
Of course it DID fail, and the financial crisis entered a new and more dangerous phase after Lehman filed for bankruptcy in September 2008. The immediate lesson that many policy makers drew – and this is contested – was that it should have been rescued.
And so they decided that other big financial firms would not fail and taxpayers’ money was thrown at the banks around the world.
But there is another lesson drawn from the Lehman episode: that it would be far better to change the rules of finance to ensure that any bank could safely fail if it gets into serious difficulty no matter how big it is.
That’s where the Financial Stability Board’s new proposals come in.
In a bid to foster accurate public discourse as well as protect the stability of the financial sector, the Association of Corporate and Marketing Professionals in Banks (ACAMB) has stepped in to educate renowned content creator, Unofficial Osas, following his misrepresentation of facts concerning the Central Bank of Nigeria’s (CBN) recapitalisation drive, and subsequent invitation by the Nigerian Police Force.
ACAMB
The intervention by ACAMB led to the successful retraction of a misleading video regarding the CBN recapitalisation policy, demonstrating the Association’s commitment to its core mandate of public enlightenment.
In his official apology video, the content creator stated, “I was invited by the Nigerian police force national cyber crime centre in Abuja over the video I posted on the 15th of December, where i spoke about 12 banks that were shut down in relation to the CBN recapitalisation policy. I would like to offer an official retraction of that video and want to reiterate that no bank is shutting down.
“As a matter of fact, most of the banks have now met the ₦500 billion minimum capital base for banks with international and the N200bn for national banks recapitalisation requirements, so no bank is shutting down.
“I want to specifically appreciate ACAMB. They were very professional in handling this case and did well to educate and enlighten me on the recapitalisation process. I am now better informed and know better”
Commenting on the resolution, President of ACAMB, Jide Sipe, reinforced the Association’s dedication to protecting the integrity of the banking sector. “ACAMB stands for the restoration of professional banking ethics and public confidence through seamless information management and public enlightenment.
“We believe that an informed public is an empowered public. By engaging Unofficial Osas, we ensured that accurate information regarding the resilience and strength of our banks was disseminated to the millions of Nigerians who follow him.”
The Intervention shows ACAMB is dedicated to evolving strategies that enhance and sustain a good image for the nation’s banking sector as well as assist in fostering better banking habits among Nigerians.
E-Financial
FirstCap MD says Payment Security Remains Biggest Barrier to Bankable Gas and Power Projects
Ukandu E. Ukandu, Managing Director/CEO of FirstCap Limited, a leading investment banking firm and subsidiary of First HoldCo Plc., has reaffirmed that payment security remains the most decisive factor in determining whether gas and power projects in Nigeria secure financing.
He shared this perspective during a panel discussion on project bankability at the 2026 SPE Lagos Energy Week.
Ukandu noted that although several risks influence financing decisions, payment risk consistently emerges as the key barrier to financial close.
“Every major risk matter, but payment risk is the ultimate deal‑breaker. Without strong payment security and disciplined collections, no project can attract sustainable financing,” he said.
He explained that lenders typically evaluate three core risk pillars, payment reliability, foreign‑exchange exposure, and contract enforceability, with payment reliability presenting the greatest challenge across Nigeria’s energy value chain. Persistent collection inefficiencies, rising arrears, and liquidity pressures continue to weaken investor confidence.
To enhance payment security, Ukandu highlighted mechanisms widely used by financiers, including letters of credit, bank guarantees, escrow accounts with payment‑waterfall structures, reserve and sinking funds, sovereign or sub‑sovereign support, and take‑or‑pay offtake agreements.
Addressing foreign exchange risk, he noted that volatility remains difficult to manage, especially for projects with dollar‑denominated costs but naira‑denominated revenues. Lenders typically mitigate this through foreign exchange ‑linked tariff indexation, partial dollarisation for credible industrial offtakers, escrow protections, selective hedging, and foreign exchange reserve buffers.
However, he cautioned that indexation alone seldom eliminates exposure due to regulatory limits and timing delays.
On legal and regulatory certainty, Ukandu stressed the need for contracts that are enforceable and clearly structured, particularly around take‑or‑pay obligations, termination payments, step‑in rights, and dispute‑resolution frameworks. He added that factors such as tariff adjustments, licence changes, and price controls can significantly affect project viability if they are not fully addressed at the contracting stage.
While fiscal incentives such as tax holidays and accelerated depreciation can strengthen project economics, Ukandu emphasised that they cannot compensate for weak fundamentals.
“Incentives make a good project better, but they do not make a weak project bankable. Cash‑flow reliability and disciplined foreign exchange management must come first,” he said. He also noted that naira‑based incentives may lose value if project revenues are not indexed.
He concluded by urging industry players to prioritise revenue security from the earliest stages of project structuring: “Protect returns at the source. Build strong offtake arrangements with solid credit support and currency alignment to ensure cash is received in full and on time.”
Sterling Financial Holdings Company Plc (Sterling HoldCo) has begun allotting 12,581,000,000 ordinary shares of 50 kobo each at ₦7.00 per share from its 2025 Public Offer.
Sterling HoldCo
The process follows Central Bank of Nigeria (CBN) and Securities & Exchange Commission (SEC) approvals.
The offer, opened September 15, 2025, drew 18,280 applications for 16.84 billion shares worth ₦117.88 billion—109.79 per cent oversubscribed.
Valid applications from 18,276 shareholders totalled 13.81 billion shares; all compliant applicants receive full allotments.
Refunds for rejects/excess, plus interest, process via RTGS/NIBSS by February 17, 2026, handled by Pace Registrars Limited.
Shares credit to CSCS accounts by the same date; new accounts held in pool pending documentation.
The raise bolsters capital for banking subsidiaries, injects ₦10 billion into SterlingFI Wealth Management to meet SEC rules, and funds credit expansion, innovation, and support for businesses/households.
Strong Financials, Diversified Growth
FY25 interim results show 99 per cent profit before tax growth; gross earnings up 46 per cent to ₦476.5 billion; assets at ₦3.92 trillion; deposits up 18 per cent to ₦2.98 trillion; shareholders’ funds up 39 per cent to ₦424 billion.
Cost-to-income ratio improved to 63 per cent from 72 per cent.
Subsidiaries—Sterling Bank Limited (conventional), The Alternative Bank Limited (non-interest, 150+ branches)—comply with CBN capital rules.
Initiatives include Mata Zalla (women tricycle training) and Plateau agriculture programme.
The offer attracted first-time retail investors, broadening ownership.
Sterling HoldCo welcomes new shareholders, poised for sustained growth and economic impact.
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