The Nigeria Deposit Insurance Corporation (NDIC) has called for a system-wide approach to crisis management, involving collaborative efforts of the financial safety-net institutions and regional deposit insurance systems.
The MD/CEO NDIC, Bello Hassan made the call at the ongoing International Association of Deposit Insurers (IADI) Africa Regional Committee (ARC) Workshop hosted by the NDIC in Abuja.
Hassan, in his welcome address at the conference, noted that the current crisis confronting many economies, including cybercrimes and ongoing Russia – Ukraine war, pose a threat to global financial stability and increasing risks to financial institutions.
“Presently, economies globally are stressed, some are still recovering from the impact of COVID-19 pandemic and the spill-over effects of the Russia-Ukraine war. As we are all aware, the fabric of the global financial stability is constantly being threatened by one form of crisis or the other.
“The potential threats at present, include the Russia-Ukraine war, cyber threats posing increasing risks to financial institutions, slow growth, increasing inflation and tighter global financial conditions which may all exacerbate pre-existing vulnerabilities.” Hassan said.
He underscored the importance of Deposit insurance in mitigating the financial system crisis. “It is noteworthy that both the 2007 – 09 global financial crisis and the COVID19 pandemic exposed the increasing relevance of deposit insurance in stabilising turbulent banking systems and as buffer for financial system stability.
“Furthermore, the crises led to the review of some of the design features of explicit deposit insurance system in many countries to accommodate emerging developments in the domestic and global financial system.
According to the NDIC boss, Growing financial inter-connectedness has shown that banking crisis can have contagion effects. A system-wide approach to crisis management, involving collaborative efforts of the financial safety-net participants and regional deposit insurance systems is therefore highly imperative.”
Those who graced the event include; Minister of Finance, Budget and National Planning, Dr. Zainab Shamsuna Ahmed, the Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, the Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Uba Sani, and Chairman, House Committee on Insurance and Actuarial Matters, Darlington Nwokocha
The Secretary General, International Association of Deposit Insurers (IADI), David Walker, and the ARC Chairperson. Mohamud, were also present at the Workshop.
Participants at the Workshop are drawn from both African and non-African countries.
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