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CBN Bailed Out Banks to Stem Distress-Sanusi

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Mallam Sanusi Lamido Sanusi, governor of Central Bank of Nigeria (CBN), has said that the apex bank opted to bail out the eight distressed banks instead of outright liquidation so as to prevent a systemic crisis which liquidation would have generated within the entire economy.
Sanusi, spoke at the 2009 National Seminar on banking and allied matters which theme was “Strengthening the Judiciary and the banking industry for economic development”,  jointly organised by the Chartered Institute of Bankers (CIB) and the CBN for judicial officers.
The apex bank had four months ago injected N620 billion into eight banks adjudged to be in grave situation following the outcome of the joint audit of all the 24 commercial banks to ensure its survival instead of outright liquidation.  
Represented by Dr. Kingsley Moghalu, deputy-governor (in charge of financial sector surveillance), Sanusi said that its action was prompted by the need to resolve immediate liquidity challenges confronting the stability of the banking sector.
He said that “Our intervention was aimed at resolving the immediate liquidity challenges facing the banking system and threatening its stability. The question then is why did we choose the option of bailout to ensure the survival of the banks rather than outright liquidation?  
“As indicated by the report of the special audit of all banks, the total deposit liability of the eight banks found to be in grave situation was N3.019tn, while aggregate non performing loans stood at N1.524tn representing 60.75 per cent of industry total.  
 “Furthermore, the eight banks accounted for about 35.6 per cent of the banking industry assets and the eight banks together accounted for 36.11 per cent of loans, 34.52 per cent of deposits and 35.6 per cent of total industry assets as at June 2009.  
 “Given the systemic importance of the banks therefore, and the potential negative impact which their liquidation could have had on the economy, liquidity support and recapitalisation which preserve their status as going concerns and ensure their survival and viability were the only logical options,” he added  
The governor indicated that while it has virtually resolved the immediate liquidity crisis threatening the banking sector, it would now focus on outlining measures to stability sustenance in the sector.
He listed that the measures would include building regulatory capacity, fast-tracking the process of establishing the asset management company, fast-tracking the implementation of risk based consolidation and cross border supervisory frameworks, easing the flow of credit particularly to the real sector and improving governance structure and practices in the financial services sector.  
 Justice Idris Kutigi, chief Justice of the Federation, while declaring the seminar open said that going by the reforms in the banking sector, it was pertinent for Judges to update their skills in specialised areas of the law.  
According to the Chief Justice, “The reforms in the banking sector have thrown up a lot of complex situations which emanate as a result of the modern form of banking. It therefore becomes pertinent to update the knowledge and skills of judges in this specialised area of the law, following rampant abuses by operators in the system”. 

 


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NCC Threatens Illegal Users of GSM Boosters with Arrest, Prosecution

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Nigerian Communication Commission (NCC) has warned telecom consumers to desist from using illegal GSM boosters.

NCC Threatens Illegal Users of GSM Boosters with Arrest, Prosecution

The commission also said that anyone caught using a GSM booster without obtaining approval of a duly licensed network operator will face arrest and prosecution.

GSM boosters are devices that transmit and receive telecommunications signals and can therefore interfere with other radio frequency equipment.

Ikechukwu Adinde, director, public affairs, NCC, said in a notice published on NCC website, that only licensed network operators are allowed to use GSM boosters.

The booster, also known as amplifier or repeater is made up of three main elements – exterior antenna, amplifier, and interior antenna.

They form a wireless system to boost cellular reception

“Members of the public should note that, willful interference with any wireless telegraphy is an offence under Section 16 of the Telegraphy Act, 2004,”it said

The agency said it will not condone any flagrant breach of this law.

It has also enforced measures to prosecute offenders.

Accordingly, monitoring mechanisms have been put in place and anyone caught using a GSM booster without obtaining approval of a duly licensed network operator will face arrest and prosecution.

“Any member of the public with useful information regarding the illegal use of GSM Boosters should contact the Commission on 09-4617000/7351 or send an email to [email protected],” the notice said.

“Individuals desirous of using GSM Boosters should note that they can only do so in conjunction with licensed network operators,” it added.

 

 


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Tizeti Selects Nokia to Provide LTE Fixed Wireless Access Solution for High-Speed internet Services in Nigeria

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Tizeti announced that it selected Nokia’s Fastmile Long Term Evolution (LTE) technology to enable usprovide superior internet services to over 1 Million subscribers in Port Harcourt, Edo and Ogun in Nigeria.

Tizeti Selects Nokia to Provide LTE Fixed Wireless Access Solution for High-Speed internet Services in Nigeria

Tizeti will deploy Nokia’s AirScale Base Station TDD-LTE and FastmileFixed Wireless Access (FWA) gatewaysto deliver premium internet and Virtual Private Network (VPN) services to Residential, Small and Medium Enterprises (SMEs).

The solution will also enable Tizeti’sto deliver a more robust, high-speedinternet service to subscribers and the flexibility to seamlessly evolve to 5G Fixed Wireless Access when needed.

Nokia’s FWA solution enables Tizeti to fast-track broadband access and provide a best-in-class broadband experience to its subscribers.

Nokia’sAirScale Base Stations ensure high-quality connectivity and coverage and enablesTizeti to evolve the network in line with customer demand.

Nokia’sFastmilegateways connect wirelessly to the existing network to createa fastbroadband connection and enhanced Wi-Fi experience in the home.

The Nokia Network Services Platform will help Tizeti to simplify operations and quickly respond to changing market demands.

Kendall Ananyi, Tizeti, said:“We are committed to providing the best-in-class network experience to our subscribers. We are confident that Nokia’s proven technology and expertise will help us differentiate our services based on quality. This a crucial project for us as it introduces LTE in our networks and allows us to bring new and innovative services to our subscribers.”

Eniola Balogun, Nokia, said:“We are thrilled to work with Tizeti on the initiative to upgrade their network to bring the latest products and services to its subscribers. Nokia Fastmile will help Tizeti to cost-effectively enhance the customer experience.

The project will also enable them to delight their subscribers by providing more reliable data services.

On the other hand, Tizeti will benefit by adding new revenue streams.”

 

 


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Risk Assets Push Higher on Vaccine Hopes; Eyes on the Fed

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By Hussein Sayed, Chief Market Strategist at FXTM,

After two consecutive weeks of back-to-back declines, global stocks kicked off Monday with solid gains amid a surge in M&A activity and positive signs towards vaccine developments. Currency markets were little changed ahead of a busy week of monetary policy announcements, while Oil and Gold ticked slightly higher.

The two big deals announced over the weekend were Softbank’s plan to sell chipmaker ARM to Nvidia for more than $40 billion and Gilead Sciences to acquire Immunomedics for a price tag of $21 billion. Meanwhile, on the vaccine front, AstraZeneca resumed its phase-3 trial on Covid-19 after being suspended last week following a neurological illness developed in one participant, and Pfizer announced that its vaccine could be distributed before year-end if found safe and effective.

 

Central Banks will take centre stage this week with the Federal Reserve, Bank of England and Bank of Japan all due to announce policy decisions. Out of the three meetings, the Fed is likely to be the most watched following its historic shift towards average inflation targeting. The big question remains how will the FOMC put this policy into action?

 

From what we know now, the Fed is set up to keep interest rates near zero for a long time, possibly for several years. Given the new framework, any spike in inflation won’t translate into immediate rate hikes as the Fed wants to compensate for the lost years when they have failed to hit the target. The dot plot will be the key guide for investors and traders alike. If inflation projections remain at 2% or below for the foreseeable future, this will solidify market expectations for a low rate environment for many years to come. That said, Jay Powell would still have to explain in more detail how the new framework will be translated into policy action.

 

In June’s economic projections, the Fed anticipated unemployment would be at 9.3% by year-end, but, in August, unemployment was well below that forecast at 8.4%. Many other economic data surprised to the upside during the June – August period in a clear sign that most economists were overly pessimistic towards the strength of the recovery. However, there is still a considerable amount of uncertainty given the latest surge in Covid-19 cases worldwide and the US, especially as we get closer into the winter season. A second wave will undoubtedly put the recovery at risk in the final quarter of the year and it will be interesting to see the Fed’s view on that issue.

 

As for the market selloff over the past two weeks, the Fed isn’t likely to show any signs of concern. In fact, policymakers should be satisfied with the pullback as the risk of a bubble in several assets has been growing due to the Fed’s extremely accommodative policies. Unless we see another 10 -15% drop, do not expect the Fed to intervene.


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