Kingsley Moghalu, a former CBN deputy governor, says the revocation of Heritage Bank's licence should not raise concern.
Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria , says badly managed banks should not have a lifetime guarantee.he CBN revoked the banking licence of Heritage Bank due to the company’s “inability to improve its financial performance”.Commenting on the revocation via his official X handle on Wednesday, Moghalu said allowing a bank to fail does not mean the financial system in the country is not stable.
“I don’t think it should worry anyone, nor does it mean the financial system isn’t sound. Banks are businesses, even if very special and thus heavily regulated ones. “A bank that is badly run should not have a lifetime guarantee. The important thing is to protect depositors’ funds.”Citing why the Asset Management Corporation of Nigeria was established, Moghalu said the purpose of the agency was to ensure systemic financial stability.
“We made sure no bank failed then to ensure systemic stability because of the unique situation of the global financial crisis,” he said. “But over the long term, I never subscribed to a view that no bank, no matter how badly run, should ever fail. That would be a wrong approach to financial regulation.”Click on the link below to join TheCable Channel on WhatsApp for your Breaking News, Business Analysis, Politics, Fact Check, Sports and Entertainment News!
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