In order to manage crises in the insurance industry, Bello Hassan, the managing director of the Nigeria Deposit Insurance Corporation (NDIC), has advocated for a system-wide strategy that will entail the cooperative efforts of financial safety-net members and regional deposit insurance systems.
At a workshop for the Africa Regional Committee (ARC) of the International Association of Deposit Insurers (IADI) that was conducted in Abuja, Hassan made the announcement.
Hassan pointed out that the COVID-19 epidemic and the global financial crisis of 2007–09 demonstrated the value of deposit insurance in calming down tumultuous banking systems.
The workshop, with the theme “Normality in Turbulent Periods; the Stabilizing Role of Deposit Insurance,” he said, “brings together finance experts from within and outside the continent, with the aim of ensuring that Africa is prepared to weather the storm of financial crises when and if they emerge.”
We are all aware that various crises are continually posing a danger to the foundation of global financial stability. The ongoing conflict between Russia and Ukraine, cyberthreats that pose growing risks to financial institutions, weak GDP, rising inflation, and tighter global financial conditions are all potential threats that could worsen already existing vulnerabilities.
This program establishes a forum for knowledge and experience exchange, acting as a safety net for the stability of financial systems.
“I am hopeful that methods for system-wide crisis preparedness and resolution choices in ensuring financial stability in the region would emerge at the conclusion of this workshop.
The NDIC, one of Nigeria’s resolution authorities, has used various resolution methods to deal with the failure of the nation’s distressed deposit-taking financial institutions. 467 insured banks—49 DMBs, 367 MFBs, and 51 PMBs—were involved in the NDIC’s liquidation efforts as of the end of December 2021.
Without the steadfast assistance and concerted efforts of other Nigerian financial safety-net players including the CBN, the Federal Ministry of Finance, Budget and National Planning, and others, this would not have been possible.