of current accounts held at the bank as the main operating target. the framework is based on the following two key elements. first, the bank continues to provide ample liquidity to the money market. to be more specific, it has been providing ample liquidity so that the outstanding balance of current accounts at the bank substantially exceeded the amount of required reserves, which is about 6 trillion yen at present. this will continue to generate confidence among market participants about raising funds and has resulted in an overnight call rate of almost zero. second, the bank has made a commitment, unprecedented in the history of central banks, to continue this policy until the year - on - year rate of change in the cpi ( excluding fresh food, on a nationwide basis ) registers zero percent or higher on a sustainable basis. this commitment will continue to have the effect of lowering longer - term interest rates by causing market participants to expect short - term interest rates to remain at zero for longer. v. the effects of monetary policy more than four years have passed since the bank adopted the quantitative easing policy. while the framework of the policy has remained unchanged, the policy effects should continue to change over time depending on developments in economic activity and prices, and also the conditions of financial markets and the financial system. at around the time of the introduction of the quantitative easing policy, the real gdp growth rate was minus 1. 1 percent year on year and the cpi decreased by 1. 0 percent year on year for fiscal 2001. furthermore, anxiety about financial system stability persisted as financial institutions were burdened with a large amount of npls. in this situation, there was a risk of a credit crunch as financial institutions became extremely cautious about extending credit to firms unless they were confident about raising enough liquidity, and there was strong awareness of the risk of the economy falling into a deflationary spiral. in such an economic and financial situation, the bank needed to firmly maintain an accommodative financial environment by providing ample liquidity flexibly and in a timely manner, thereby easing the public's and market participants'concerns about the availability of funds and ensuring stability in the financial markets. as a result of the bank's provision of ample liquidity, financial markets remained stable and rapid tightening in corporate financing was not observed, even when financial institutions'liquidity demand had continued to rise in a situation where, for example, bank stocks plunged and there was heightened uncertainty regarding measures to deal with the npl problem in the fall of 2002. during

sanusi lamido sanusi : evolving financial landscape – strategies for economic resilience keynote address by mr sanusi lamido sanusi, governor of the central bank of nigeria, at the 4th annual banking and finance conference of the chartered institute of bankers of nigeria ( cibn ), abuja, 23 september 2010. * * * protocol 1. let me begin by appreciating the opportunity and the honour given to me to be part of this important occasion, which is meant to chart a course for sustainable economic development of our dear country, nigeria. the theme of this conference “ evolving financial landscape : strategies for economic resilience ” is indeed very apt and topical, and could not have come at a more opportune time than now, considering not only the needs of country, but the rapid changes that are taking place in the financial sector and the role it is expected to play in the evolving economic landscape. it is my expectation, therefore, that the issues that will be discussed during this conference will further assist in laying a solid foundation for the much needed economic transformation of the nigerian economy. it is usual at this conference for the governor, if delivering the keynote address, to update the industry on his stewardship in the past year, and the expected duration of policy. 2. as you are aware, since the commercial banking business commenced in 1892 in nigeria, the financial system has experienced several episodes of banking crisis. the first of such crisis took place in the late 1940s and early 1950s, mainly as a result of lack of appropriate regulation, leading to the collapse of about 21 of the 25 indigenous banks which had been established by 1954. while these failures were resolved mainly through self - liquidation, the outcome was a bitter experience, especially for depositors who lost their money. 3. systemic crises re - appeared in the nigerian banking industry between 1989 and 1998, which many attributed to the withdrawal of public sector deposits from the banks, and as a consequence exposed the weak financial condition of most financial institutions whose financial fragility had been concealed by a combination of factors, including public subsidy and improper accounting systems. the deregulation of the banking system in the mid - 1980s facilitated a dramatic increase in the number of financial institutions and also exposed the banks to intense competition for which many of them were ill - prepared for. some of the banks attracted a significant market share through improved customer services at competitive prices. in contrast, many banks appeared to have been set up largely to take