Lemo Warns of Capital Market Bubble Post-Recapitalization

Tunde Lemo, the former Deputy Governor of the Central Bank of Nigeria (CBN) and current Chairman of Flutterwave, expressed concerns regarding the potential emergence of a capital market bubble following the successful recapitalization exercise in Nigeria's banking sector. In an exclusive interview, Lemo advised CBN Governor Olayemi Cardoso and his team to implement stronger regulatory safeguards and macro-prudential policies to preserve financial stability and prevent speculative excess.

He noted that the recapitalization exercise raised a total of N4.65 trillion within 24 months, enhancing the resilience of the financial system. Lemo emphasized the importance of maintaining a minimum capital requirement for banks and conducting stress tests to ensure they can cope with economic downturns.

He warned that uncontrolled lending could trigger a market bubble if not managed according to macro-prudential policies, which are critical for maintaining financial stability.