The Director, Banking Supervision, Central Bank of Nigeria, Mrs. Agnes Tokunbo-Martins has urged banks and organisations who require risk management to review their framework regularly. She also disclosed that the central bank would soon carry out an impact assessment test on banks.
Martins said this at the Risk Managers Association of Nigeria (RIMAN) round table in Lagos at the weekend.
She said: “I must say we do have so many risks in front of us and this is the time that risk managers really need to be on their toes. There are all sorts of risks that have come up; ranging from currency mismatched, interest rates risks in the banking books. If these risks are involving on a daily basis, then the skills required to manage them, even to identify them, and manage them are changing.
“Risk management framework can’t be static. If we say that the risk change on a daily basis, the framework can’t be static. Even the appetite can’t be static, the mitigate need to change. The risk management framework needs to be reviewed constantly.”
She further added: “Risk management in Nigeria banks is no longer at the rudimentary stage; it is becoming more and more sophisticated. I think is much more appreciate than it used to be, some banks that have had their fingers burnt know why risk management is something you have in place just because the regulator says it should be there. It is not down on so many banks that it is something we really need.”
She also congratulated RIMAN on its recent certified exams, saying, the association was doing all it takes to get risk managers prepared for likely challenges in the industry.
On the impact assessment on banks, Martins added: “We in the central bank very soon would be conducting an impact assessment and we expect that the banks already are doing that on their own.”
The CBN Governor, Mr. Godwin Emefiele last week admitted that banks are currently facing different risks, but said the risks are not peculiar to the economy and surmountable.
He said: “As a result of the current challenges being faced in the global economy, all agents in the financial system are facing tremendous risks. Normally, in any economy, when there’s a slowdown or recession, naturally, financial institutions particularly banks would face certain risks: risks of NPLs rising and different other risks.
“And what that does is that it imposes on the regulator a greater challenge to ensure that it strengthens its prudential guidelines to ensure that the banks and particularly depositors are protected.
“So I’m saying Nigerian banks, like other banks in other climes, are facing risks but those risks are surmountable and the CBN is doing its best to ensure those risks don’t crystallise to a point where we begin to talk about depositors risking their deposits.”
He added that rumours about the risk in the banking system were overtly elevated, adding that “these are risks faced by any banking or financial system in any clime today that is facing the challenges arising from the global challenges”.
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