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Bullion

Keywords

Banking, Banking supervision, Corporate governance and Risk management

Abstract

In the supervisory architecture of financial institutions have been of interest to policymakers and the academic. It began to be discussed in the late eighties when the Scandinavian countries were establishing a single supervisory authority in their country. The discussion heated up in the late nineties when the United Kingdom created the Financial Services Authority (FSA) and continued in this decade as many developed and developing countries consider the adoption of more integrated supervision structures. The paper considers the issues of separation of financial supervision from central banking and the rationale and challenges of establishing on integrated supervision structure in Nigeria. lt argues that since the Nigerian financial system is just recovering from shocks transmitted to the economy from the global financial crisis, this time may not be auspicious to introduce an integrated supervisory regime that is separate from the central bank. It recommends that the Government should consider carefully the cases for and against central bank's financial supervision based on the circumstances and capacities in Nigeria. 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. It's 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.

Author Bio

The author is a staff of Ebonyi State University, Abakaliki.

Publication Title

CBN Bullion

Issue

3

Volume

32

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