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Consumer protection and financial stability in Malaysia lessons for Nigeria
No full textThe paper highlights the Bank Negara Malaysia (BNM)\u27s approach to consumer protection and financial stability in Malaysia with the aim of drawing lessons for Nigeria. The paper proposes an action for the establishment of a financial mediation bureau in Nigeria, to be set up by the Central Bank of Nigeria (CBN). To achieve this, the paper is structured in six sections. Following th is July - Sept. 2008 introduction is section 2 which examined the conceptual issues while Section 3 dealt with an overview of the consumer protection infrastructure in Nigeria. Section 4 focused on the Malaysian experience giving a background to the Malaysian approach, while highlighting the main features of the consumer protection infrastructure in Malaysia and the structure of the Malaysian Financial Mediation Bureau. ln section 5 are the lessons for Nigeria, while section 6 summarized and concluded the paper
Nigerian Stock Market Reflection of The Global Finance Crisis: An Evaluation
No full textWith its roots in banking, the sub-prime mortgage crisis that commenced in the United States in 2007 soon resonated in other sectors of its financial system, and the economy, at large. It spread quickly to the developed economies in Europe, including the United Kingdom, and Asia. In the case of the Nigerian stock market, following initial relative insulation, the speed of contagion and response was comparatively slower. However, the effects began to manifest in the first quarter of 2008. The objective of this paper, therefore, is to review the global financial crisis, in the context of its recent effects on the Nigerian stock market. The timeliness and significance of this subject is in view of the un-salutary resonance that the plunging trends, if not reversed, could have on economic development through stifling the productive sectors\u27 access to lower cost equity capital, amongst others. To this end, the rest of the paper is organised as follows: Section 2 highlights background issues on the global financial crisis, while section 3 contains a review of relevant empirical literature; Section 4 outlines the resonance of the crisis on the Nigerian stock market; Section 5 analyses recent movements in key indicators of the market; Section 6 presents current policy options and perspective measures in resolution. The paper concluded that, the Expectedly, owing to empirically proven cyclical patterns of economic development, there will be future crisis. However, the contagion effect on economies will depend on preparedness. Fundamentally, to curtail severe contagion is to improve on the macroeconomic policy environment. This is critical to influencing the performance of the capital market in general and the stock market, in particular. The time to commence is now, and in anticipation that the winds of current global financial crisis will subside sooner than later
Central Bank Communication and Monetary Policy: The Case of Central Bank of Nigeria
No full textThe importance of concise communication in monetary policy making cannot be over emphasised . A g o o d communication of policy definitely strengthens the institutional independence of central banks and enhances the effectiveness of monetary policy. However, no one single method could fit all when it comes to designing good communication strategies because central banks face different constraints as they try to fine-tune their messages. With current reforms and financial liberalization, there is added impetus for increased communication between the Central Bank of Nigeria (CBN), market operators, stakeholders and the public in general. Monetary policy needs to be explained and well understood for the purpose of transparency and accountability. The study concluded that, the credibility is an attribute needed by the CBN, and establishing it is a challenge when there is a recent history of inflation being on the increase and no central bank can establish or maintain credibility through communications alone. It is what you do, much more than what you say, that is important in this regard. Therefore, the Bank should intensify its developmental efforts like the Agricultural Credit Guarantee Scheme, Micro Finance Scheme, and the SMIESS, which are all poverty eradication efforts
Keynote address at the seminar on: Financial sector developments: challenges for risk based supervision and effective monetary policy implementation
No full textThis is the sixteenth in the series (Executive Seminar) jointly organized by the Research and Human Resources Departments of the Bank. The forum represents one in which the Executives of the Bank brainstorm on contemporary economic issues to stir the banking and financial sector in particular and, the economy at large, on the path of sustainable growth and development. The forum also provides an avenue for capacity building and human resource improvement through intense dialogue with economic and financial experts on current developments
A framework for financial stability
No full textThis is a review of the article “a framework for financial stability” by Andrew Haldane, Central Banking Quarterly Journal, Vol XV, No. 3, February 2005
The imperatives of developing risk management framework for individual risk elements in Nigerian banks.
No full textThis paper states that for a bank to be successful over the long term, it has to effectively manage its opportunities, threats and uncertainties. The point of risk management is not to eliminate it. That would eliminate reward. The point is to manage it. That is, choose where to place bets and where to avoid betting altogether
Appropriate mix of energy resources for economic development in Nigeria.
No full textThe article identifies the various forms of energy resources available in Nigeria and proposed how best these energy resources could be into efficient use. It observed that Nigeria sis blessed with abundant renewal energy and non-renewable energy resources and appreciated the fact that, while renewables will continue to play a granting role, “they are not expected to overtake fossiI fuels in the near future in meeting both Nigerian and global energy demand. The paper concludes that most of the energy consumed in the country come from oil and gas and viewed this to be a move in the right direction as these non-renewable energy resources are very much available and relatively cheap. This is against the background that hopefully, by the time these non-renewables are attaining exhaustion, technological innovation would have come up with cheaper ways of exploiting the renewables. The article called for vigour in utilising the enormous volume of natural gas currently being flared s this will serve the dual purpose of stomping out gas flaring in the country and providing the country with a cheap energy source. It then called on the Government to invest in gas utilisation projects by embarking on massive laying of national grid. It advocated for oil to be locally consumed only where it is absolutely necessary, while the rest of it be exported to earn the much-needed foreign exchange. It posited that effort should be made not only to improve m the capacity utilisation of the refineries, but also to increase their cumulative installed capacity. The article called functional modalities of private partnership of refineries to be worked out while Government draws up a comprehensive master plan for the development of the petrochemical industry. The article is of the view that the Nigerian coal resources should be left for future consumption. It called for the employment of appropriate non- renewable energy resources in sparsely populated area. Considering that Nigeria is rat the tropics, the abundant solar energy could be used in pondering projects in sparsely populated regions. Government at various levels could use solar energy to ponder social amenities such as water boreholes, schools, Health centres, and streetlights. the abundant wind in the northern part of the country could be used to ponder projects such as irrigation of farmlands. As rivers and streams crisscross the entire country, studies should be carried on I to identify appropriate locations for small hydro plants to serve small communities and projects. Considering that Nigeria is not yet self- sufficient in food production, the use of biomass should be restricted to organic waste. The paper opined that generally, the government should commission a body to identify the appropriate energy resources for a given project/locality in the country. As a lesson from the wasted earnings in the 1970s, the article is of the view that the extra earnings emanating from the high crude oil prices should be wisely invested as this does not last forever. Over-consumption and under-investment experienced during previous oil windfalls should be avoided. The article is optimistic that if these are carried out, the country would accelerate industrialization and economic development thereby improving its score on the Human Development Index. While the article appreciates that none of the forms of energy offer cheap, clean and abundant energy enough to replace the vast amount of conventional fossil fuel consumed daily in the country, it called for integration of renewable energy supplies into Nigerian energy sector as this would help temper the cyclical nature of fossil fuel markets and can give renewables a foothold from which to grow
Understanding nominal anchor: A case study of Central Bank of Nigeria
No full textAs a country\u27s monetary authority, a central bank is responsible for the conduct of monetary policy. This onerous process begins with developing a plan of action of employing interest rates or controlling the money stock to influence the economy. The focus of monetary policy is to safeguard the value of the domestic currency in terms of what it can purchase as a basis of providing a framework for the achievement of wider government economic objectives of non-inflationary economic growth, employment, stable exchange rate, favourable balance of payments and more generally a stable financial environment for the economy. In view of the importance of nominal anchor in the conduct of monetary policy, this paper examine in details nominal anchors available to a central bank in achieving its core mandate. Ancillary to this is the examination of the nominal anchor employed by the Central Bank of Nigeria in the recent past and proffer the way forward as the nation\u27s monetary authorities prepare for migration to inflation targeting framework of monetary policy. Following this introduction, this article presents some conceptual and theoretical issues on conventional and unconventional monetary policy framework. It also examines the choice of nominal anchor by the Central Bank of Nigeria in its different regimes of monetary policy. The following policy recommendation were proffered; Monetary Authorities\u27 Communication with the Market, Data integrity and Currency, Fiscal and Monetary Policy Coordination and Harmonization, Effective Surveillance of the Banking System, Deepening the Banking System, Good Corporate Governance and Risk Management. ln this paper, the various nominal anchors available to a central bank as well as the conditions under which each could be optimally utilized were examined. The performance of monetary targeting as nominal anchor in the Central Bank of Nigeria was found to be mixed with relatively better outcomes in the 2002-2007 period. The development was due to deployment of ICT and other market infrastructural development that facilitated improvement in the interbank money market structural and technological changes in the economy as well as financial sector innovation have significantly weakened the hitherto assumed Jinxed money-income or money-inflation relationships, while the nominal anchor is less clear to market participants and the general public
The stock market channel of monetary policy trasmission mechanism in Nigeria.
No full textThe paper examines the reforms in the Nigerian financial sector and the subsequent increase in the participation of Nigerians in economic activities especially as it relates to stock market. It suggested that monetary policymakers should pay attention to the impact of policy action on the activities of the Nigerian Stock Exchange
Setting the operational framework for producing inflation forecasts.
No full textThe paper discusses the intricacies and processes involved in the production of the “best possible inflation forecastsâ€. Issues such as the choice of an appropriate index, the forecast design and requirements as well as communication strategies were discussed therein. The significance of the paper lies in the fact that it serves as an operational guide to countries transiting to inflation targeting. A summary of the paper is presented in the review, followed by lessons for Nigeria