Lamido Sanusi's attempts to reform Nigeria's financial sector since he took over as central bank governor in June have been so dramatic that commentators have dubbed them the "Sanusi tsunami".

In the aftermath, widespread abuses have emerged. Mr Sanusi has bailed out nine banks to the tune of $4bn and fired the management at eight of them. In doing so, he has challenged some of the most powerful interests in sub-Saharan Africa's second biggest economy. In a wide-ranging interview with Tom Burgis, the Financial Times 's West Africa correspondent, at his Abuja office on December 14, Mr. Sanusi vowed to continue his battle, defended himself against critics who claim he is overstepping his mandate and outlined how he plans to restore the banking system to health. Below is an edited transcript.

We've had this "Sanusi tsunami" through the banking system. After the drama, now you're trying to piece this system back together. Are we now moving on or are you still fighting the same battle you were fighting at the start?

I think the battle will continue to the extent that battles are fought on two fronts at the end of the day. You've got two parties. You don't just toss something like this and walk away from it. They are not going to let you walk away. They are not going to walk into jail. So once you start this, you are in a fight until the end. For me, and I've said this over and over again, some of what you've seen in banking is just symptomatic of all that is wrong with the country.

Just elaborate on that a little bit.

If you take the abuse of office, if you take the corruption, if you take the impunity with which the rich do break the law, it's something that happens across the board. The people you are dealing with are not isolated individuals. They are part of a group. They are part of a caste. They've got allies in politics. They've got allies in bureaucracy. And their allies work with them and they stick together. So it's never easy to just say you are dealing with these CEOs [who were fired and face criminal charges] and that's the end of it. You've got to realise, it would be very naïve to think that all the people who have been beneficiaries of their largesse, the political parties that have received donations, the politicians that have been funded, the sentry consultants and contractors that are around them, it would be very naïve to think that they are just going to watch you basically cut off what they see as a major source of financing.

Is there active resistance then from all those quarters to what you're doing?

Yes. I mean, you feel it. You feel it in the newspapers. You feel it in the kinds of roadblocks that people are trying to throw in your way.

What sort of things?

Exaggeration of, for instance, the impact of the credit crunch. I mean that credit has grown by 20 per cent between March and November but everything you hear is that the banks are not lending; the allegations against EFCC [the Economic and Financial Crimes Commission] criminalising debtors and therefore stifling entrepreneurship. Perhaps some of the newspaper advertorials, they have been going on, full page adverts in all national dailies which have probably cost over [Naira] 100m so far, just aimed at discrediting a process. These are all part of fights. And we still don't know how far they are going in the judiciary and the extent to which they will try to compromise due process.

Do those judicial battles imperil the whole exercise?

I don't think so. I think that if you are talking about financial sectors to be convinced, they've got to deal with the regulatory issues, you've got to deal with the macro-prudential issues, but you also deal with the governance issues. And they all go together. I don't see how you can deal with governance issues until you actually make the point that there are consequences for certain types of behaviour. So for me, they are just one part of a total financial stability initiative.

I spoke to a few bankers in Lagos before coming up here and some say that you have opened too many fronts, that when you think of those big names who are on that debtors list or the big names who owned those banks, you seem to be fighting a battle against the most powerful people in Nigeria. Can you win that? Other people have tried to do these kinds of battles and they've lost.

At the end of the day, if you don't battle them, they will battle you. They hang together. And from the very beginning, my attitude was, if I move against these CEOs, who else is likely to come after me? There's no point pretending. There is no point behaving that you don't know that these are the people who are fighting against you. And I didn't open up the front. The only way you can avoid fighting these people is to do nothing. There is no way they are going to let you do it. And so will we win? I don't know. I'm not even sure it's about winning. For me, it's about doing what we think is the right thing. Nobody ever guarantees that his actions would change a system but one thing that is guaranteed is that inaction never changes a system.

Do you think one person could change Nigeria?

I'm not even sure that I'm one person because look at the kinds of things that are happening, for example. Take the extraordinary support of the president. It wouldn't really be correct to say that this is one person. What we have done, for instance, we couldn't have done without a president who says I will give you support. You show him the facts, told him that this is the situation

And we really need to do something about it and he says go ahead. And he sticks to it in spite of whatever pressures he comes under.

We've had an Economic and Financial Crimes Commission that has stepped up to the plate. Now, I don't know the issues people have with the EFCC prior to this, but from the beginning of this process, every time I have said, look, this is a problem, I need to arraign this person, I need to check this person, I need to look at this, they've come out and they've given it.

We've had, from time to time, to speak to the finance minister because from the very beginning, the decision not to let banks fail, for us, would entail some financial costs. And again, he just issued a statement yesterday, a statement of support after the banking numbers came out [showing some heavy losses]. No panic locally but you still want to have that assurance coming from the minister of finance that despite what the numbers are, the government will continue to stand behind these institutions.

But the president, of course, has been sick and out of the country for three weeks. That support, presumably, isn't there at the moment.

It is. He's still the president. I'm assuming that I have the support of the presidency. No one has signalled otherwise. Frankly, for me, I will continue doing what I'm doing and continue to at the best of my abilities. Whether the support will continue, I know that up to this point I've had no reason to think that that support has waned.

But the support of the president has been very important to what you're doing.

Naturally it is. The support has been important. Political support is important to the success of whatever we want to achieve, precisely because the central bank needs other agencies of the government. We need legislation at times. We need the EFCC. We need the police. We need the state security services. We need physical protection for ourselves.

Have you increased your own security?

Well, the government did.

The government decided you needed more security?

Yes. From the very beginning, the president decided that there was no point taking chances. It was from August 14th [the date of the first bail-out and dismissal of executives]. He basically just asked that the security around me be increased.

Can I ask you about the asset management company [AMC, the proposed vehicle to take toxic assets off the banks' balance sheets]. The national assembly goes on recess very soon. They're not really going to pass it by the end of the year, are they?

I think they will. The AMC bill, remember, is with the House of Representatives committee now and they are going to arrange a public hearing this week. And ultimately once they pass it in theory, the Senate can just concur.

Yes, but do you think that's likely?

We are pushing and pushing for it.

What's holding it up?

It's a big bill and also, unfortunately, it got to them at a time when it just was getting towards the end of the year. But we've tried as much as possible to, in advance, engage them. We gave them advance copies of the bill, we had discussions with key officers and explained to them what the bill was and what we were trying to achieve. We had an advance discussion with the president before the bill came to him, to basically see if there were any reservations. So we've tried to do that and that helps smooth the way.

Can you give us some of the details? I remember when you were talking in Cape Town, it was Naira 350bn to 400bn. Is that roughly how big the thing is going to be?

Well, it could potentially be anything up to a trillion [naira]. It depends on what asset you are taking. If you took margin loans and loans secured by shares, given where the market is today, we're probably about 300 billion. And also proprietary positions that are waiting in the banks.

The prop positions are included in the 300?

Yes, because the market has lost 70 per cent off its peak so now some of those might even be worth much less today. If you look at what happened after the publication of accounts they are probably going to lose even more. So in terms of what valuations we place on those, we would obviously be concerned to place on them a value that would represent some significant recovery on the books of the banks because that's part of the resolution process. So in a sense, the AMC is a vehicle for not just a resolution of a toxic acid problem but the recapitalisation of the institutions.

You buy somewhere between what they paid and the price now and then you split the upside? Is that how it works?

In a number of cases, to be honest, unless you bought the shares of the banks or the shares of other companies, the upside is not likely to be much. There are also cases where the collateral is not stock market.