…signs MoU with foreign regulators
The Central Bank of Nigeria has reaffirmed its commitment to the stability of the country’s financial system, highlighting that regular stress tests are conducted to identify potential vulnerabilities in banks.
The apex bank stated this in a press release signed by CBN’s Acting Director of Corporate Communications, Mrs Hakama Sidi Ali, on Tuesday.
According to the statement, “The CBN recognises the crucial role that confidence plays in banking operations and wants to affirm that all deposits in Nigerian banks are secure.”
The statement noted that the bank’s continuous stress testing of financial institutions is aimed at maintaining the resilience of Nigeria’s banking sector.
According to the CBN, these stress tests are an integral part of its strategy to safeguard the financial system and protect depositors’ funds.
The tests help the apex bank detect and address emerging risks before they impact the stability of the sector.
“Regular stress testing is conducted to identify potential vulnerabilities, helping to ensure that our financial institutions are resilient,” the statement read.
In addition to stress testing, the CBN has implemented Early Warning Systems that promptly identify potential threats to financial stability.This proactive measure allows the CBN to take immediate action when risks are detected.
The statement noted, “In addition, the CBN has implemented Early Warning Systems that proactively detect and address emerging risks, allowing us to provide timely solutions to any foreseen issues.
“The Bank’s approach to Risk-Based Supervision ensures that it focuses its regulatory efforts on institutions that may pose the highest risk to the financial system. This targeted strategy allows it to maintain a robust oversight mechanism while promoting the overall health of the banking sector.”
Also, the statement noted that the CBN has entered into Memoranda of Understanding (MoU) with countries where Nigerian banks have subsidiaries.
This international collaboration, according to the CBN, strengthens regulatory coordination and ensures that banks operate within safe and sound frameworks, adhering to both local and international banking regulations.
The statement reiterated the CBN’s dedication to fostering a safe banking environment, assuring the public that the institution remains vigilant in its efforts to monitor and adapt strategies to secure the financial interests of all Nigerians.
This statement from the CBN comes amid concerns over the stability of the banking sector, as the central bank works to maintain public trust and ensure the soundness of the nation’s financial institutions.