I was just thinking of writing a Purchase Hydrocodone Pills column on the new term limit imposed by the Central Bank of Nigeria on bank CEOs when Purchase Hydrocodone Pills I saw
Is the CBN too powerful?
In the Purchase Hydrocodone Pills national confusion over our president who has vanished into thin air, a Purchase Hydrocodone Pills significant but little remarked event occurred earlier this week. The Central Bank announced that Purchase Hydrocodone Pills it was retroactively imposing a 10-year limit over the tenure of bank CEOs, effective July 31.
It was not lost on most discerning observers that Purchase Hydrocodone Pills the primary targets of this new policy appeared to be two of our most prominent bank chiefs, Tony Elumelu, who Purchase Hydrocodone Pills engineered a takeover of UBA by the much smaller Standard Trust Bank that Purchase Hydrocodone Pills he used to run six years ago; and Jim Ovia, who Purchase Hydrocodone Pills built Zenith Bank from scratch and made it a ubiquitous presence.
The legality of the Purchase Hydrocodone Pills CBN decision is hardly in question: we have a central banker so powerful that Purchase Hydrocodone Pills it can dissolve the boards of banks, dismiss their executives, dictate their operations and Purchase Hydrocodone Pills pretty much act in almost any way it pleases.
The necessity for Purchase Hydrocodone Pills such level of authority is not hard to see. The banking system of any country plays an Purchase Hydrocodone Pills outsize role in the national economy. Poorly regulated or supervised, banks are Purchase Hydrocodone Pills quite capable of destroying the economy and impoverishing the rest of us. The United States barely dodged the Purchase Hydrocodone Pills bullet in the last quarter of 2008, when its banks tottered and Purchase Hydrocodone Pills nearly collapsed, bringing the world’s financial system down along with it. And the Purchase Hydrocodone Pills level of sheer criminality in our banking system, exposed in the Purchase Hydrocodone Pills past seven months only because a complicit Central Bank governor was replaced with a Purchase Hydrocodone Pills more alert one, was an object lesson in the need to Purchase Hydrocodone Pills guide the banking system with a firm hand.
No one can Purchase Hydrocodone Pills deny that the wretched excesses of banking chiefs with supersized egos, exemplified by Cecilia Ibru at Oceanic Bank and Purchase Hydrocodone Pills Erastus Akingbola at Intercontinental, made an aggressive posture by the Central Bank an Purchase Hydrocodone Pills urgent imperative.
But the Purchase Hydrocodone Pills question needs to be asked: should the Central Bank be assuming the Purchase Hydrocodone Pills roles of board directors to dictate how long a chief executive may serve? Heavily regulated though they are, unlike, say, a Purchase Hydrocodone Pills cement company or a flour mill, banks nonetheless remain the property of private investors, and Purchase Hydrocodone Pills in the absence of a specific regulatory breach by identifiable bankers, should the Purchase Hydrocodone Pills Central Bank be in the business of stipulating how long they may serve? Setting term limits, as a Purchase Hydrocodone Pills general principle, of course works well in politics and government. The basic assumption, which is Purchase Hydrocodone Pills well founded in our experience of the frailties of leaders, is Purchase Hydrocodone Pills that power corrupts, and the earlier we can kick the bums out, generally the Purchase Hydrocodone Pills better for the state.
This may, of course, not necessarily work in private enterprise. Bill Gates built Microsoft from Purchase Hydrocodone Pills the scratch and ran it for 25 years. The mercurial Jack Welch, during a Purchase Hydrocodone Pills two-decade tenure, rebuilt General Electric into at one time the world’s largest company by market capitalisation. And in our own country, Atedo Peterside founded and Purchase Hydrocodone Pills ran IBTC for nearly 20 years, making it one of the Purchase Hydrocodone Pills country’s most respected banks.
Central Bank officials justify their latest action thus: A banking license is Purchase Hydrocodone Pills a rare privilege, granted on the implicit assumption that the Purchase Hydrocodone Pills holder will act in the highest traditions of prudence and Purchase Hydrocodone Pills restraint, and essentially run a bank in the best interests not only of depositors and Purchase Hydrocodone Pills shareholders but of the public at large. Needless to say, many of our most powerful bankers failed that Purchase Hydrocodone Pills test in recent years, culminating in last year’s crisis that Purchase Hydrocodone Pills has forced the treasury to pony up about N1 trillion to Purchase Hydrocodone Pills rescue the banks lest the economy collapse. That’s a number with a lot of zeroes to clean up after Mrs. Ibru’s mess.
Officials also argue that Purchase Hydrocodone Pills banks are unique because they hold custody of other people’s money to Purchase Hydrocodone Pills trade with, with the clear understanding in the public mind that Purchase Hydrocodone Pills the government, by giving them such a right, is putting the Purchase Hydrocodone Pills full faith and credit of the public treasury behind them. And this Purchase Hydrocodone Pills is not simply a shareholder matter. In general, for every one naira shareholders place in a Purchase Hydrocodone Pills bank, the public deposits six, seven, eight, maybe even N20. This distinguishes a Purchase Hydrocodone Pills bank from Guinness or Chicken Licken.
Crucially, officials argue that Purchase Hydrocodone Pills our recent experience makes it a matter of prudence and commonsense to Purchase Hydrocodone Pills impose limits on the tenure of banking chiefs. “The certainty that Purchase Hydrocodone Pills they can stay as long as they wish and maybe even transmute to Purchase Hydrocodone Pills bank chairman makes some CEOs act with impunity,” one senior regulator told us last week. “Knowledge that there will be change conditions behavior.”
There lies the Purchase Hydrocodone Pills rub. Those leery of a Central Bank with untrammeled powers say that Purchase Hydrocodone Pills the CBN, by making such a sweeping rule regarding tenure, is Purchase Hydrocodone Pills inadvertently admitting its own failure to regulate and supervise the banking system. Were the Purchase Hydrocodone Pills CBN competent in the discharge of its duties, it would have Purchase Hydrocodone Pills had a bit more confidence to prevent widespread abuse by bank CEOs and Purchase Hydrocodone Pills to punish rogue bank chiefs where the situation demands. As one senior banker tells us, “a one size fits all rule does not often work well.”
Cynics might feel free also to Purchase Hydrocodone Pills point out that Tunde Lemo, a powerful deputy governor of the Purchase Hydrocodone Pills CBN, was directly in charge of banking supervision over the past few years that Purchase Hydrocodone Pills the most reckless behaviour on the part of bank CEOs occurred. It would not be Purchase Hydrocodone Pills unfair, and might even be somewhat generous, to accuse Mr. Lemo of negligence. But a Purchase Hydrocodone Pills term limit apparently does not apply to him.
It is Purchase Hydrocodone Pills instructive that the bank chiefs immediately affected have refrained from raising any hackles regarding their sudden forced exit. In one fine example, Mr. Elumelu immediately got his board to Purchase Hydrocodone Pills announce that a succession plan was in place and appears to Purchase Hydrocodone Pills want a tidy exit that does credit to the UBA, as he makes clear elsewhere in this Purchase Hydrocodone Pills newspaper.
Our view is Purchase Hydrocodone Pills that, while the CBN governor had got most of the big things right so far in his turbulent nine-month tenure, one must always be Purchase Hydrocodone Pills wary of a government official with power to do almost anything.
We will remain vigilant.
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