advantage of the arbitrage opportunities in the foreign exchange market, rather than undertake more conventional / traditional banking business. the consequence was a mass distress that laid the foundations for the bank consolidation exercise in 2004, which induced a breath of life to our banks, enhanced their capital position and increased their involvement in business activities. 4. the recent global financial crisis, however, strained the gains that had been achieved post - consolidation in the sector. the immediate impact of the global financial turbulence on the nigerian financial system, particularly the banking system, mirrored global trends but was largely contained because of the limited integration with the global financial system. while offshore funding of the domestic banking system was growing before the crisis, its scale was manageable and the central bank was able to accommodate commercial banks foreign exchange needs in the depth of the global crisis. coupled with major internal management problems in some of the banks, the crises impacted the economy through various channels – significant decline in oil revenue leading to revenue attrition for all tiers of government ; reduced capital inflows into the economy ; significant drawdown of external / foreign reserves ; demand pressure in the foreign exchange market ; substantial decline in stock market capitalization and share prices ; huge bank losses on margin loans and share - backed facilities as well as loans to the downstream oil and gas sector ; low valuation with many banks trading below book value ; declining asset values ; and declining credit growth. 5. distinguished ladies and gentlemen, it became clear that the cbn had to act decisively when it became evident that some of the banks had more deep - rooted problems that were not discernable from the regular reports rendered to the regulatory authorities. some of these actions included replacing the chief executives / executive directors of the banks identified as the source of instability in the industry and injection of the sum of n620. 0 billion into the banks in an effort to prevent a systemic banking crisis. the injection of this fund ( tier ii capital ) into these banks then was considered sufficient to resolve and stabilize them to enable them to continue normal business operations, with arrangements made to recover non - performing loans from the banks ’ debtors while guaranteeing all foreign credits and correspondent banking commitments. 6. as an additional measure to strengthen the reform process, the cbn commenced the process of creating an asset management company, as an important vehicle for dealing with non performing loans of the banks. as you are all aware, the asset management corporation of nigeria ( amcon ) has already been established by law and its board

is awaiting senate confirmation for it to formally take - off. as a resolution vehicle, amcon is expected to soak in the toxic assets of the cbn - intervened banks and provide liquidity to them while facilitating their eventual re - capitalization. 7. while efforts are being made to stabilize the banking system and, indeed, the financial system and restore public confidence, the cbn is also focusing attention on ensuring that the financial system, in general, and the banking system, in particular, begin to serve the needs of the nigerian economy so as to make the nigerian economy to be resilient. this, the bank has been doing through ensuring the availability of long - term funds at an affordable interest rate to drive industrial activities and infrastructural developments in the country, having identified low industrial basis and huge infrastructural deficit as binding constraints on achieving nigeria ’ s economic development objectives. in a bid to address the problem of infrastructure deficit and enhance credit to the real sector, a total of n500. 0 billion fund was set up by the cbn made up of n300. 0 billion for power / infrastructure projects and for intervention in the aviation sector and n200. 0 billion for the refinancing / restructuring of banks ’ existing loan portfolios to manufacturers and small and medium enterprises ( smes ). a n200. 0 billion credit guarantee scheme for smes and n200. 0 billion commercial agricultural fund for the agricultural sector were also established. in addition, the cbn had recently released n150. 0 billion credit facility to the manufacturers at a fixed rate of 7 % through the bank of industry ( boi ) and deposit money banks. pencom to unlock pension assets for private sector – agra - unido – fund plan chain. 8. in addition, the bank has also collaborated with the securities and exchange commission ( sec ), the nigerian stock exchange ( nse ), fpls and ministry of finance to reduce the cost of transactions, particularly bond issues so as to diversify funding sources away from banks as well as attract more long term foreign investors into the sector. efforts are also being intensified towards strengthening regulatory and supervisory framework and enhancing monitoring of the operations of the deposit money banks ( dmbs ) to ensure that they remain safe, sound and healthy. these efforts are expected to ensure the sustenance of public confidence through the enforcement of appropriate disclosures and reinvigorating the policy of zero tolerance on all unprofessional