Following the collapse of Silicon Valley Bank, president/chairman of Chartered Institute of Bankers of Nigeria (CIBN), Dr Ken Opara has said policymakers and regulators are sifting through the rubble to consider what steps must be taken to prevent a similar crisis from occurring again.
The CIBN Advocacy Dialogue Series is a thought-leading program created to empower various stakeholders with knowledge on emerging issues affecting the banking industry and the economy. The discussions were under the theme: `Failure of Silicon Valley Bank in USA: Global Impact and Lessons for the Nigerian Financial System.’
Opara, who was represented by the first vice president, CIBN, Prof. Pius Olanrewaju, disclosed this at the Chartered Institute of Bankers of Nigeria (CIBN) advocacy dialogue series 7.0, held physically and virtually, yesterday in Lagos.
He noted that Silicon Valley Bank was one of the most prominent lenders in the world of technology start-ups. Opara said that it had grown extraordinarily fast, with total assets almost doubling from $116 billion at the end of 2021 to $216 billion at the end of 2022, making it the 16th largest bank in the U.S.
He however said the bank collapsed for multiple reasons which sent shockwaves through the financial system, reviving memories of the global crisis in 2008. “This occurrence has sparked a chain reaction of similar failures, including Credit Suisse, First Republic Bank, Signature Bank and Silver-gate Bank while amplifying the need for experts across the globe to discuss the systemic issues plaguing the U.S. banking system, the regulatory gaps as well as its global impact.
“Additionally, policymakers and regulators are sifting through the rubble to consider what steps must be taken to prevent a similar crisis from occurring again. It is important to state that this event, of course, happened in the United States, however, because the world is inextricably linked by globalisation, could greatly destabilise markets and economies around the globe.
“So, it is pertinent to discuss the global impacts to extract insights to strengthen the banking system and ways to further improve the operational efficiency of Nigerian banks, in particular,’’ Opara said.
Also, the executive director (Operations), Nigeria Deposit Insurance Corporation (NDIC), Mr Mustapha Ibrahim, urged regulators in the banking industry to draw supervisory lessons from the failure of Silicon Valley Bank and Credit Suisse by ensuring proper risk management.
According to him, there is a need for financial sector managers and regulators to, first and foremost, understand the business that they are involved in.
