As the National Assembly fine-tunes the bill to establish the Asset Management Corporation (AMC), Arunma Oteh, director-general of Securities and Exchange Commission (SEC) told the Senate on Thursday that the body when established will not be a full panacea for the full recovery of the capital market.
She said this at a one-day public hearing called to aggregate the views of stakeholders before the bill is passed into law. Nwala Chudie, another stakeholder would, however, want the bill to cover all financial institutions, including Bank of Industry; Bank of Agriculture and Development; Federal Mortgage Bank and even the Nigeria Export-Import Bank.
Oteh in her submission noted that "removing capital market related non-performing assets off the books of banks would reduce pressure by banks on operators and as such assets would now be owned by the AMC which would neither be in a hurry to dispose off the assets nor mount repayment pressures on operators".
She said "it is expected that the liabilities of the operators to banks would be restructured into a much longer term obligation", saying "this should give 'breathing space' to operators and effectively get them back into their core functions of financial intermediation.
"SEC is of the view that taking toxic assets off the books of banks and instilling good corporate governance, supported by the various banking reform initiatives, should ultimately improve profitability and image of banks, most of which are quoted on the Nigerian Stock Exchange".
Chudie in his presentation said "AMC should be a composite law with customary benchmark geared towards catering the needs of all financial institutions irrespective of ownership structure or appellation".
AMC not panacea for full recovery of capital market – SEC DG (http://www.businessdayonline.com/index.php?option=com_content&view=article&id=9389:amc-not-panacea-for-full-recovery-of-capital-market--sec-dg-&catid=85:national&Itemid=340)