2013年-IMF国际货币组织全球_Nigeria_Publication_of_Financial_Sector_Assessment_Program_Documentation––Technical_Note_of_Banking_Cross_14页_460kb

Summary of Nigeria: Publication of Financial Sector Assessment Program Documentation—Technical Note of Banking Cross-Border Issues

Core Content

This technical note, published by the International Monetary Fund (IMF) in May 2013, provides an analysis of cross-border banking issues in Nigeria and offers recommendations for improving supervision and coordination. It outlines the challenges and opportunities associated with the international expansion of Nigerian banks, the current regulatory framework, and the need for enhanced cooperation between domestic and foreign supervisors.

Main Points

1. Background and Context

• Nigerian banks have expanded significantly since the 2005-2010 sector consolidation.
• Increased capital requirements and post-crisis uncertainty have driven banks to expand within Sub-Saharan Africa (SSA) and globally.
• The global financial crisis created opportunities for Nigerian banks to fill gaps left by European and American banks.

2. Cross-Border Expansion

• Nigerian banks have expanded primarily in West and Central Africa, with some subsidiaries in Europe and the Middle East.
• The capital adequacy ratio (CAR) for international banks is 15%, compared to 10% for domestic banks.
• Nigerian banks engage in cross-border liquidity flows, often borrowing from Western countries and investing in African subsidiaries.
• Some banks use cross-border liquidity to meet local CAR requirements or to engage in carry trade strategies.

3. Challenges in Cross-Border Supervision

• The Central Bank of Nigeria (CBN) lacks comprehensive information on cross-border liquidity flows, especially for subsidiaries of foreign parent banks.
• There is a lack of coordination between CBN and foreign supervisors, which may hinder effective crisis management.
• The CBN has limited capacity to verify intra-group liquidity and capital flows, risking oversight of systemic risks.
• The CBN’s recent circular restricts capital transfers to foreign subsidiaries, which may be counterproductive and undermine trust with host countries.

4. Recommendations

• Withdraw the CBN Circular: The CBN should stop enforcing the circular that restricts capital outflows to foreign subsidiaries and instead handle capitalization on a case-by-case basis.
• Expand Cross-Border MoUs: Include crisis management in Memorandums of Understanding (MoUs) and establish pre-agreed procedures for information sharing and decision-making.
• Establish Supervisory Colleges: Initiate dialogue with host authorities to set up supervisory colleges for Nigerian banks with significant cross-border presence.
• Promote Mutual Recognition: Create mechanisms for mutual recognition of decisions in insolvency or reorganization proceedings, ensuring non-discriminatory treatment of foreign creditors.
• Burden Sharing Arrangements: Consider ex-ante burden sharing arrangements to enable quick crisis response without compromising domestic interests.
• Enhance Data Collection: Improve the granularity and accuracy of data on cross-border transactions and funding flows.
• Learn from International Models: Adopt practices from the European Bank Coordination "Vienna" Initiative (EBCI) to enhance cross-border regulation and crisis management.

Key Information

• Glossary:

  • BSD: Banking Supervision Department
  • CAR: Capital Adequacy Ratio
  • CBN: Central Bank of Nigeria
  • EBCI: European Bank Coordination "Vienna" Initiative
  • eFASS: Electronic Financial Analysis and Surveillance System
  • IFI: International Financial Institution
  • MoU: Memorandum of Understanding
  • SSA: Sub-Saharan Africa
  • UBA: United Bank of Africa
  • WAMZ: West African Monetary Zone

• Figure 1:

  • Shows cross-border liquidity flows in January and August 2012, highlighting the increasing volume and range of destinations.

• Box 1:

  • The Vienna Initiative was established in 2008 to coordinate crisis management and resolution among multinational banks and their supervisors in emerging Europe. It successfully addressed collective action problems and supported macroeconomic stability.

Conclusion

The note emphasizes the need for the CBN to enhance its cross-border supervisory capabilities and foster closer cooperation with foreign regulators. It highlights the importance of learning from international models like the Vienna Initiative to improve regional financial stability and mitigate risks associated with Nigerian banks’ global expansion.