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Bullion

Keywords

Banking, Banking supervision, Corporate governance and Risk management

Abstract

The paper has considered two basic issues in financial supervision. These are the separation of financial supervision from central banking and the rationale and challenges of establishing an integrated supervision structure in Nigeria. lt identified three basic functions of financial supervision as micro prudential, macro prudential and conduct-of-business supervision, which address systemic stability, financial soundness of individual institutions and consumer protection respectively . The paper is divided into six sections. Following this introduction is section ll which examines the conceptual and theoretical issues in consolidated supervision. Section lll reviews the experience of other jurisdictions in the practice of consolidated supervision. ln section lV, the relevance of adopting consolidated supervision in the Nigerian banking sector is highlighted, while the challenges of consolidated supervision is x-rayed in section V. The conclusion is made in section Vl of the paper. This paper has shown that consolidated supervision has much in common with the normal supervision being practiced at the level of individual banks. lt's main importance lies in the recognition that banking and other financial activities are not always confined within the balance sheet of those particular entities which have been licensed as banks. Rather, it entails an overall evaluation, both quantitatively and qualitatively, of the strength of a group to which a bank belongs, in order to assess the potential impact of other group companies on the bank.

Author Bio

The Author is a staff of the Central Bank of Nigeria, Abuja

Publication Title

CBN Bullion

Issue

3

Volume

32

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