This is a very thoughtful policy from Nigeria’s apex bank. Yes, ‘Nigeria’s central bank instructed the nation’s lenders to divert windfall currency revaluation gains into buffers against future losses, following the devaluation of the naira earlier this year.
“Banks are required to exercise utmost prudence and set aside the foreign currency revaluation gains as a counter-cyclical buffer to cushion any future movements in FX rates,” the Abuja-based Central Bank of Nigeria said in a circular to lenders. “Banks shall not utilize such FX revaluation gains to pay dividend or meet operating expenses,” it said.’
Wisdom. Why? We do not want to privatize success only to socialize losses. Yes, if the switch should move to the other side and bank’s suddenly see losses, they may suddenly need governments to bail them out after they have partied with this “vapour” profit.
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Banks, keep that money because “echi di ime” {tomorrow is pregnant} as they say in the Igbo Nation.
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The profit wasn’t a product of hardwork or any special bestowing of fortunes, so it does not call for killing of cows every Friday and Sunday, because it will still go the same way it came. That squandering spirit cannot be called upon in this case, so the banks and their shareholders should continue to maintain some table manners.
Hello Sir,
My name is Blaise Anih. I’m the founder of Questunit (www.questunit.com) and from Enugu, Nigeria.
Please can I get some time to pitch to you via your mail rather than doing that your post comment??