The Central Bank of Nigeria (CBN) has restated the importance of financial stability to the country, saying that it is imperative for economic growth. The Deputy Governor, Corporate Services, CBN, Adebayo Adelabu, stated this at the maiden financial journalists’ and banks’ image makers’ parley organised by the Centre For Financial Journalism (CFJ Nigeria) in Lagos at the weekend.
He said, “Financial stability is paramount for economic growth, as most transactions in the real economy are made through the financial system.”
He pointed out that the World Bank has also stated that a stable financial system was, “capable of efficiently allocating resources, assessing and managing financial risks, maintaining employment levels close to the economy’s natural rate, and eliminating relative price movements of real or financial assets that will affect monetary stability or employment levels.”
He further stated that with stability, the financial system would have the capacity, “to absorb shocks primarily via self-corrective mechanisms, preventing adverse events from having a disruptive effect on the real economy or on other financial systems.”
Noting that ensuring financial stability is part of the core mandate of the CBN, he stated that in more recent years, the apex bank, has, however, performed some major developmental functions, by intervening in all the key sectors of the Nigerian economy.