TheCable

Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), has urged African central bank governors and other financial sector regulators to strengthen their regulatory and supervisory roles to forestall any sudden run on banks in their respective jurisdictions.

Emefiele spoke on Wednesday at the opening of the ‘African Central Bank Conference 2023’ held at the Global Leadership Centre in Johannesburg, South Africa.

The two-day conference commenced on Wednesday, March 15, and will end on Thursday, March 16.

Speaking on the current global dynamics and specific policy developments in Nigeria to address emerging shocks, Emefiele advised central banks on the continent to draw lessons from the recent failure of Silicon Valley Bank and Signature Bank in the United States of America, by putting in place regulations that will prevent any run on banks in their countries.

“A major reason that contribute to bank failures is when the bank is unable to meet depositors’ demands for their money. This usually results to a run. There is need for regulators to insulate the banking system from collapse,” he said.

While sharing Nigeria’s experience in regulating banks, Emefiele said that the threats posed to the financial system necessitated the release of new guidelines and regulations to tackle potential infringements and, in the process, protect depositors’ funds as well as promote greater transparency in the sector.

According to the CBN governor, regulators must be alive to their responsibilities by ensuring that banks under their regulatory watch are financially healthy and do not suffer a similar fate as the Silicon Valley Bank, which, until its collapse recently, catered to many of the world’s most powerful tech investors.