CBN Advocates Stronger Governance in Bank Recapitalization

The Central Bank of Nigeria (CBN) has reiterated the importance of stronger governance and risk discipline in its ongoing bank recapitalization program. Dr. Blais Ijebor, Director of the Risk Management Department at CBN, spoke at a virtual risk management roundtable organized by the Enterprise Risk Management Professionals Association, emphasizing that the recapitalization process must minimize risks while maximizing opportunities for greater post-recapitalization value.

He noted that past experiences, particularly the 2004-2005 bank reforms and the aftermath of the 2009 financial crisis, demonstrate that capital alone does not guarantee stability. The CBN aims to align the recapitalization exercise with global standards, incorporating stress tests and recovery plans to ensure banks can withstand shocks without public intervention.

Ijebor urged risk leaders to assess the potential impacts of mergers and acquisitions on institutional risk profiles. The discussion highlighted the need for stronger regulatory frameworks and emphasized the importance of board oversight and compliance in managing financial crime risks.