Q: Following the global financial crisis and a domestic banking crisis, the Central Bank of Nigeria (CBN) has implemented major banking reforms over the past year or more. What is your guiding strategy behind the reforms and how do you see their impact on the economy?
A: Fundamentally, what we have tried to do with the reforms is to address the root causes of the crises rather than addressing sectors. At the heart of the crisis is a banking system that grew very rapidly, driven largely by liquidity from oil and the public sector but without any structured focus, without any strategic centrality as an intermediary for providing resources to the real [non-financial] economy. Money got onto the banks' balance sheets but was used on betting on asset classes [margin lending] and other non-productive loans, which in turn led to the crisis.
