15 August 2011

Nigeria: Investors Have Lost Confidence in Global Markets - W-Bank Chief

Lagos — World Bank President Robert Zoellick has said world markets have entered a "new danger zone," noting that investors have lost confidence in the economic leadership of several key countries. This came even as bankers in the country, weekend, said outright liquidation of BankPHB, Afribank and Spring Bank by Nigeria Deposit Insurance Corporation, NDIC, would have ruined the nation's economy.

Speaking at the Asia Society's annual dinner in Sydney, World Bank President Zoellick said the global economy was going through a "multi-speed recovery."

He said in the past two weeks, global stock markets have suffered massive falls on fears about the state of leading economies.

Zoellick said: "What has happened in the past couple of weeks is that there is a convergence of some events in Europe and the United States that has led many market participants to lose confidence in economic leadership of some of the key countries.

"I think those events combined with some of the other fragilities in the nature of recovery have pushed us into a new danger zone. I don't say those words lightly."

He said he was making the point so that policy makers would take it seriously.

Meanwhile, bankers, under the umbrella of the Association of Senior Staff of Banks, Insurance and Financial Institutions, ASSIBIF, said liquidation would have meant that over 11,000 direct jobs, depositors and shareholders' funds would have gone down the drain.

The group argued that following the nationalisation, only shareholders could be said to have lost out.

In an interactive meeting with Labour correspondents, yesterday, President of ASSBIFI, Comrade Sunday Salako, said no worker had lost his or her job to the exercise and that the banks could be said to be in safe hands.

He said: "In the banking industry, there are three major stakeholders: the workers, the depositors, i.e the customers and the shareholders. In the past, of all the reforms done in the banking sector, this is the first time that banks have been nationalized. In the past, it would have been outright liquidation. In outright liquidation, all the three major stakeholders would have lost out.

"There will be no workers, there will be no shareholders and there will be no depositors because NDIC would come in and wind up the bank. But in the instant case, what the regulators did was to ensure that only one major stakeholder loses."

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