AMCON

19 Pages Posted: 1 Oct 2011

Date Written: September 30, 2011

Abstract

The current second round distress in the Nigerian financial system within two decades is capable of causing a total systemic collapse of the entire Nigerian financial system (which includes the organs of the capital market). The approach of this article is not to look at AMCON alone as an institution, what it is set up to do, the benefits of its functioning, if it is allowed to function freely and transparently. The article also preview, the factors underlying and incidental to the anomalies that could warrant the need to bring in AMCON as a resolution vehicle in its infinite varieties that is looking at the issue in discuss from the two sides of the coin, allowing us to discuss the root causes, effects and solutions to the financial distress, arising from financial and operational mismanagement of institutions in the financial system. The issues in faulty credit processing, mismanagement and lack of control that causes loan failures and losses and other causes of financial crises in the Nigeria financial system are issues reviewed critically in the first part of this article. In the second part of the article the author expressed his faith in the capability and potency of the AMCON institution to resolve all factors of financial distress and undercapitalization, if properly applied, he therefore looked at AMCON, issues related to its effective application and functioning; the reasons for its invocation this time around, by the financial regulatory authorities. The third part of the article assessed the anxieties, doubts, lack of trust and suspected double standards that tends to make AMCON as presently constituted seem as being used as a smokescreen by the financial regulators to achieve some hidden agenda, aimed to acquire major shareholdings in banks through, nationalization, to enable certain interest groups buy into the banking system. The author made recommendations on areas needing improvement in the AMCON enabling legal provisions The need is also stressed for the body of existing shareholders in financial institutions and the general public to follow with keen interest the ongoing reform activities in the financial system, particularly as it concerns AMCON, and the banks nationalization process.

Suggested Citation

Alawiye-Adams, Adewale Adegoke, AMCON (September 30, 2011). Available at SSRN: https://ssrn.com/abstract=1936153 or http://dx.doi.org/10.2139/ssrn.1936153

Adewale Adegoke Alawiye-Adams (Contact Author)

Afe Babalola University Ado-Ekiti ( email )

AFE-Babalola Way, Ijan Road
Ado-Ekiti, Ekiti State, South-West Nigeria 234
Nigeria
2348033900620 (Phone)
2348023462818 (Fax)

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