By Peter Egwuatu
Former Director General of the Securities and Exchange Commission (SEC), Mr. Wole Adetunji has faulted the monetary policies of the Central Bank of Nigeria (CBN) saying the apex body ought to face developmental role as nothing was wrong with the monetary policies hitherto in place.
Speaking to Vanguard in Lagos on the state of the banking and capital market segment of the Nigerian economy, he said, â€œ The CBN has been limiting itself to money market. It is suppose to pursue developmental role. The apex bank is suppose to be in_charge of the financial system. It contributed to bring down the capital market through the somersault of its policies. Now that the stock market has started recovering since the beginning of the year the CBNâ€™s recent circular to banks to limit margin loan to certain percentage has sent another panic to the market and we witnessed a nosedive in the past two weeks.
Continuing, he said, â€œ It will be better for the CBN to work in harmony with other financial regulators to have a harmonized policies that will lead to the overall development of the financial system. The Financial Institutions Regulatory Co_ordinating Committee need to strengthened to have efficient financial system.â€
Adetunji, criticised the CBN for not carrying the shareholders of the troubled banks in the ongoing reforms, saying, shareholders who own these banks donâ€™t know how their investment are being run.
While commenting on the new rules introduced by the SEC to strengthen the capital market, the former SEC boss said, â€œ My worry on these rules is the implementation. It is one thing to make rules another thing is to implement them.
The down turn of the Nigerian stock market was caused by regulatory failure. It the regulators were discipline and up and doing some of the problems would have been corrected. Well all that is now past, it is a good development that the Commission has come out with new rules and I implore them to implement it fully. Any operators found wanting should be dealt with in accordance with the law. Rules are not constant they are expected to be reviewed from time to time as situations demand.
While commenting on the rule that affects Private Placement, Adetunji said, â€œIt is a good one from the Commission because a lot of wrong thing has been done to the market.
The private placement exercise is not suppose to be a public affairs. It is suppose to be a private arrangement where promoters of private companies seek the interest of selected high networth of investors to raise funds to boost their businesses and not the other way round. So the private placement also contributed to crash the market as most of them collected money from the general investing public with the promise to list the shares at higher prices on the floors of the Nigerian Stock Exchange (NSE).â€