Alh. Bala Zakariya’u, a past President of the Chartered Insurance Institute of Nigeria(CIIN), says there’s need for structural reform of the financial services sector and the national economy so as to engender improved investors confidence and attract more foreign direct investments.
According to him, a key component of the reform should revolve around strengthening the inter-regulatory cooperation to build synergy between the various regulatory agencies in the financial services sector.
Zakariya’u, who is also the Former Chairman of Niger Insurance Plc, pointed out that that such collaboration should reduce regulatory arbitrage and duplication of regulatory requirements, enthrone well coordinated institutional regulatory structure and a more risk-focused regulatory regime built on strong legal frameworks.
The modern tendencies globally, according to him, have been to build synergies, out of institutional regulatory collaboration, to license and supervise insurance, pensions, capital markets and other congruent financial services.
“It is now, more than ever before, a necessity to create the right framework that would enthrone inter-regulatory collaboration and coordination of regulatory functions to eliminate the tendency for regulators to work at cross purposes. This should enhance proactive, efficient and effective supervision of the emergent financial industry conglomerates, offshoots of an obvious market growth, as our economy continue to improve,” he pointed out.
In a similar vein, he charged the regulators in the financial services industry to create the enabling environment for mega companies to be established through mergers and acquisitions, adding that “such mega financial institutions are to be tasked with higher capital and solvency, sophisticated information technology infrastructure, best in class human resources and strong brand presence.”
Zakariya’u further said the mega institutions should also have better all-round capacities and connections, as well as cognate strategies to deepen market penetration and enhance finance inclusion.
While fears may be expressed that creating mega institutions may lead to the emergence of ‘companies which may be too big to fail, which, is every regulator’s nightmare,’ he believes ‘this ought to be a preferred nightmare, than what we currently have by default: companies which are too small to succeed.’