Risk managers of banks in the country have been called upon to put in place measures to forestall a reoccurrence of issues that led to the crisis in the financial sector.

Central Bank of Nigeria,CBN, Governor, Mallam Sanusi Lamido, who made this call at the 11th annual conference of Risk Management Association of Nigeria, RIMAN, in Lagos, said this becomes necessary especially as the banking reforms and resolution of the crisis in the sector near its conclusion.

Sanusi, who was represented at the event by Deputy Director, Risk Management Department, CBN, Mr. Olawoyin Adebola, explained that the approach taken by the apex bank in the ongoing reform was different from traditional approaches in the past, where banks would have been allowed to fail.

He maintained that the objective of the CBN was to build a stable financial system.

Sanusi noted that the ongoing global financial crisis continues to hurt both Nigeria and other countries across the globe, adding that the global financial crisis affected the gains that were achieved during the 2005 banking sector consolidation.

According to him, a sound financial system can only be achieved when substantial and fundamental economic reforms are implemented.

Some of the cardinal pillars of the ongoing reforms, according to him, include enhancing the quality of banks, establishing financial stability and ensuring that the financial sector contributes to the growth of the real sector. “The important thing is to learn from the past and avert the dangers of the past. We should all try to be vigilant risk managers ahead of any situation, so as to guide our institutions, our financial sector and economy as a whole.”

Also speaking, Mr. Emmanuel Abolo, President, RIMAN, in his paper titled; ‘Recent Market Turmoil: Rethinking the Role of Risk Managers in a Changing Wold,’ pointed out that failures of financial institutions were often caused by failure to adhere to basic risk management principles, especially when new products and markets emerge.

Abolo stated further, “In many cases, this is due to the pressure that firms face to increase market shares, combined with unrealistic expectations about growth and performance prospects.

“But no matter how much, risk exposures get sliced, diced and distributed among financial market participants, financial innovation cannot mask poor underwriting.

“Banks are not only participants in the financial markets; participants cut across several sectors and industries and in a world of interconnectedness, we cannot remain blind to systemic dynamics.

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