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‘The risk-focused banking supervision option’


Regulators in the banking industry have been advised to embrace risk-focused banking supervision technique as a new tool to deal effectively with the new challenges posed by globalisation and liberalisation in the financial system to ensure efficiency in banking supervision.

The Director General, West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, gave this advice at the opening ceremony on ‘Banking supervision, intermediate level’, organised by WAIFEM in collaboration with the College of supervision of West African Monetary Zone (WAMZ), in Lagos, stressing that the financial markets have become global and the use of administrative controls to restrict the activities of financial intermediaries is no longer in vogue.

He went on, “In recent years, the international banking scene has witnessed strong trends toward globalisation and consolidation of the financial system.  Therefore, the stability of the financial system has become a major challenge to bank regulators and supervisors throughout the world.  A relatively new tool to deal effectively with the new challenges is risk-focused banking supervision.

“Risk banking supervision requires optimising the synergy from different activities, including regulatory and supervision functions to enhance efficiency and effectiveness of the supervisory process. It entails development and maintenance of a dynamic supervisory plan that responds to the organisation’s changing risk profile.

“The successful implementation of risk-focused supervision needs the existence of efficient risk management architecture, adoption of risk-focused internal audit, a strengthened management information system, and well trained personnel in risk management and risk-based audit.”

Also speaking, the Deputy Director, Financial Policy and Regulation, Central Bank of Nigeria (CBN) Mr. Shola Awoyungbo explained, “Banking is different from other businesses because it is the engine growth of the economy. The role of WAIFEM is to build capacity on economic and financial management to ensure that banks operating within the West African sub-region work in synergy to enhance trade facilitation and core banking efficiency in terms of modern payment system and funds transfer”.


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