The Director-General of the Nigerian Stock Exchange Commission (SEC), Mr. Musa Al-Faki, yesterday called on the Nigerian government to take over the sick banks and companies quoted on the Nigerian Stock Exchange (NSE).
Al-Faki also called for the prosecution of the CEOs of identified sick banks and firms for contributing to the crisis engulfing the stock capital market which had lost N2.08tn (US $13.8 billion) in January 2009 alone.
Al-Faki blamed the banks for giving unsecured loans of close to N400 billion to stockbrokers to dabble in the stock market. Stockbrokers however, are now defaulting on the loans, tiggering a sub-prime mortgage type credit crisis that is threatening to bring down the Nigerian capital market.
The SEC DG believes that the bail-out strategy, as implemented in other countries, would restore confidence in the market and buoy prices.
However the CBN believes that Nigeria banks have sufficient enough capital to weather the current storm, though for long they might be able to do that remains to seen.
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The bailout hasnt worked in any of the listed countries, why would it work here. I'm all for the prosecution of all kings of criminals though but unfortunately i dont see it happening here. Pity...
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