Nigerian banks are being encouraged to grow their retail lending books in order to grow the economy, according to a report on Bloomberg, by increasing their loan-to-deposit ratio to 60 percent. "Banks that fail to meet the threshold will have their cash reserve requirements, or the amount of money they have to keep at the central bank, increased, according to the circular," according to Bloomberg. Ahmad Abdullahi, director of banking supervision, says in a letter seen by Bloomberg that to encourage lending to small businesses and consumers and more mortgages, these sectors shall be assigned a weight of 150% in computing the LDR. "The order comes after Governor Godwin Emefiele urged banks to boost lending or have access to risk-free assets restricted. Speaking at the most recent Monetary Policy Committee meeting in May, he said he would 'provide a mechanism' to limit banks' purchases of government securities. Lenders have long piled into naira bonds, which yield 14.3% on average, one of the highest rates globally. Lenders argue that with inflation running at more than 11%, extending more credit to businesses and individuals carries high risks and could endanger the financial system."
Facebook, its putative Libra stablecoin, and its amazing network of 2.3 billion people have had financial regulators in a panic lately. Many of those 2.3 billion people were freaking out yesterday evening when something went wrong on the Facebook and users were unable to send messages or upload photographs. Although Facebook's services are "free", users took to Twitter and other non-Facebook services to rage against the machine. There are few people as incandescently angry as Instagram influencers who cannot post to Instagram to explain why they're not currently influencing. "Last time all three of Facebook's major services broke, the outage lasted for many hours. It later blamed that problem on a server issue that had a knock-on effect on Instagram and WhatsApp, as well as Facebook, since the three use shared infrastructure. 'As a result of a server configuration change, many people had trouble accessing our apps and services,' Facebook posted on Twitter after that previous outage was fixed. 'We've now resolved the issues and our systems are recovering. We're very sorry for the inconvenience and appreciate everyone's patience.' When those problems happened in March, they were said to be perhaps the biggest outage in the history of the internet, hitting millions of people," reports the UK Independent. Now, try to think of how that will play out if people suddenly can't spend their Libra....
Writing about banking without talking about politics is pointless, and we're not pointing the finger at any one country here. Out of the public, many Spaniards lament that the country is hopelessly corrupt. A long-running case is now resurfacing that threatens the reputation of BBVA, with former chief executive Angel Cano due to appear before Spanish magistrates today. The story relates to allegations of bribery and spying, naming jailed former police chief Jose Manuel Villarejo as the man who was allegedly hired by the bank to spy on a potential buyer of the bank. "In February, the bank said that it had not noticed any impact on its business but said the case could have a 'negative reputational or economic impact.' In March, Francisco Gonzalez temporarily stepped down as honorary chairman of BBVA to avoid any harm to the Spanish bank's reputation during the inquiry though he has not yet been called to testify in this case." Also in Spain, Andrea Orcel is hanging around Santander looking for a payout of 100 million euros to compensate for the disappearance of his chief executive job. The job offer was withdrawn when Spanish bankers looked at the mobs forming in the street and decided that Mr Orcel wasn't worth the hassle.
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