The Central Bank of Nigeria (CBN) has said the reforms in the banking industry were necessary to achieve stability in the industry.
Deputy Governor, Corporate Services, CBN, Alhaji Suleiman Barau, said this at the fourth Eurofinance conference tagged: "Treasury, Risk and Cash Management in West Africa," held in Lagos at the weekend.
Barau was represented by the Deputy Director of the Banking Supervision Department, CBN, Mr Steve Nwadiuko.
He highlighted the massive corporate governance failure that led to weaknesses in some banks, which necessitated the intervention by the regulator in 2009.
"Radical reforms were required to strengthen the stability and resilience of the financial system and prevent the occurrence of systemic risk. This made chief finance officers and treasurers of institutions to learn from experience and fashion out strategies to deal with crisis and also ensure that their institutions remained liquid, profitable and competitive," Barau explained.
According to him, in order to avert future occurrences, the Basel II of banking supervision required stronger provisional practices and advocates change in the accounting standards.
Barau also stated that apex bank had been conducting fundamental reviews of the rules and guidelines.
"The G20 reforms also address the supervision and regulation of systematically important institutions improving those derivative margins and core financial infrastructure reforming compensation practices to support financial stability.
"In Nigeria, the CBN has done a reform strategy in the aftermath of the global financial crisis, the primary focus of which was to restore financial stability, institute corporate governance and risk management culture in banks, protect investors, depositors and financial services customer as well as to ensure that the financial system drives sustainable economic growth and development.
"The reforms are anchored on enhancing the quality of banks, establishment of financial stability and ensuring that the financial sector contributes to the real economy," he declared.
Barau pointed out that the CBN had also integrated the banking systems into the global best practice in terms of risk management, financial reporting and disclosure through the adoption of Basel II and Basel III framework and the International Financial Reporting Standard (IFRS) in the banking sector.
Barau added: "The banking model in the country has also been reviewed in Nigeria Banks have being categorised into commercial, merchant and specialised banks as well as regional, national and international banks with appropriate capital requirement for each."