Stability of global financial system is essential to economic growth -Sokefun

Stability of global financial system is essential to economic growth -Sokefun   

The Board Chairman of the National Insurance Deposit Corporporation (NDIC, Mrs. Ronke Shokefun has said that the  stability of global financial system is essential to economic growth, amongst others factors.                  

Speaking  at the IADI - ARD Committee Workshops and Annual General Meeting on "Normality In Turbulent Period: The Stabilizing Role of Deposit Insurer in Abuja, Sokefun said  global economic growth continued to weaken, as indicated by the trajectories of many macroeconomic indicators.           

She said this weak performance was fueled by the lingering effects of the COVID-19 pandemic and the truncation of nascent recovery from the pandemic-occasioned recession by the Russia-Ukraine war.

 "Although the Nigerian banking system has shown resilience despite the challenges posed by the pandemic, the operating conditions for businesses is becoming more challenging as a consequence of the Russia-Ukraine war.  

Notwithstanding these developments, the Nigerian banking system remained healthy overall as the capitalisation level is above the prudential requirement and the Non-Preforming Loans ratio is also within the requirement at the end of second quarter 2022.       

She said the gathering of deposit insurers, supervisory & resolution authorities, professionals and other players in the financial system around the globe to share their views and experience is most welcome, as it highlights their commitment towards fostering financial stability.  

It is worthy of note that the theme of todays’ workshop, “Normality in Turbulent Periods: The Stabilising Role of Deposit Insurers” is no doubt topical in the light of the dynamics and emerging threats facing the financial system in recent times and the implications for Deposit Insurers.

In a world where financial systems are now inextricably linked, robust cooperation is required to ensure financial system stability, and by extension growth and stability of the global economy. 

It is against this backdrop that we need to keep working through forums like the IADI and other collaborating agencies to share experiences, strengthen our supervisory tools, monitor the effectiveness of insured institutions’ Contingency Planning and Crisis Management Framework as well as ensure our readiness for timely, and prompt intervention to engender financial system stability.

Distinguished participants, it is noteworthy that the NDIC has for a long time since its establishment in 1988 collaborated with other international standard-setters and deposit insurers.       

For instance, the NDIC has collaborated in capacity development with the IADI itself, the ARC members, the Financial Stability Institute, the US FDIC, the Islamic Financial Services Board and several other international agencies. 

Also, the Corporation has Memorandum of Understanding (MoU) to share information and on capacity development with deposit insurance agencies of Ghana, Poland, South Korea, Taiwan and Uganda.

"It is in the spirit of such collaboration that this workshop was organised so as to serve as a forum to dissect pertinent issues, share experiences, compare notes and elevate our understanding of the role of deposit insurers in: Early Detection & Timely intervention; Contingency Planning & Crisis Management; Crisis Simulation to strengthen operational resilience; and Contingency Planning Framework for a safer, and more resilient financial system, that is supportive of sustainable economic growth in each jurisdiction. 

"The presence of global experts from both fiscal, monetary, supervisory and regulatory agencies, and Deposit Insurers in gathering like this, is a manifestation of our commitment towards having robust and sustainable system that can detects problem early enough and manage crisis adequately in the banking system to foster financial system stability.