four months ) while the sub - committees could meet more frequently. i would appreciate your thoughts on these suggestions. let me return to the theme of my speech - consolidation and strengthening of banks! strengthening and consolidating the banking system will constitute the first phase of the reforms designed to ensure a diversified, strong and reliable banking sector which will ensure the safety of depositors money, play active developmental roles in the nigerian economy, and be competent and competitive players in the african regional and global financial system. the goal of the reforms is to help you become stronger players, and in a manner that will ensure longevity and hence higher returns to your shareholders over time and greater impacts on the nigerian economy. we strongly believe that the ultimate beneficiaries of this policy shift would be the nigerian economy - the ordinary men and women who can put their deposits in the banks and have a restful sleep ; the entrepreneurial nigerians who can now have stronger financial system to finance their businesses ; and nigerian economy which will benefit from internationally connected and competitive banks that would also mobilize international capital for nigerian development. this measure is about the nigerian people. it is about meeting their needs. it is about positioning nigeria and nigerians to become competitive players in the 21st century. the second phase will address the issues of diversification, including programmes to encourage the emergence of regional and unit / specialized banks. case for mergers and acquisitions as instrument for banking soundness before i go further, let me share some thoughts on why mergers and acquisitions should be taken seriously as an instrument for enhancing banking efficiency, size, and developmental roles. all over the world and given the internationalization of finance, size has become an important ingredient for success in the globalizing world. in the world of finance, no country can afford to operate in isolation. the last few years have witnessed the creation of the world ’ s banking group through mergers and acquisitions. the trend has been influenced by factors such as prospects of cost - savings due to economies of scale as well as more efficient allocation of resources ; enhanced efficiency in resource allocation ; and risk reduction arising from improved management. mergers and acquisitions especially in the banking industry is now a global phenomenon. in the united states of america, there had been over 7, 000 cases of bank mergers since 1980, while the same trend occurred in the united kingdom and other european countries. specifically, in the period 19971998, 203 bank mergers and acquisitions took place in the euro area. cross - country mergers are also

charles chukwuma soludo : consolidating the nigerian banking industry to meet the development challenges of the 21st century address by mr charles chukwuma soludo, governor of the central bank of nigeria, at the special meeting of the bankers ’ committee, abuja, 6 july 2004. * * * introduction i am delighted, as part of this first meeting of the bankers committee under my chairmanship, to share some thoughts with you on a major policy shift regarding the banking industry. given the potential implications of the policy shift for the ownership and operations of the banking industry, we thought it was important to have this special meeting ( with chairpersons of boards of banks also in attendance ). as you are aware, i assumed duties as the governor of the central bank barely one month ago and we are still working out the fine details of the new agenda for repositioning the cbn and the financial system for the 21st century. our goal is to consolidate and build upon the achievements of the sector especially in the last 10 years and to take the system to greater heights. let me use this opportunity to invite all of you to send us any proposals or ideas that you might have in respect of how best the cbn can continue to serve the financial system and the nigerian economy better in the years ahead. i will share the strategic agenda with you and the generality of nigerians in due course, especially in respect of the agenda for ensuring exchange rate and price stability, managing interest rate for stability and development, macroeconomic coordination, vigorous pursuit of the developmental roles of the central bank, improvement of the payments system, financial sector diversification and regulatory reforms, and strategies for integrating nigeria ’ s financial system into the african regional and global financial system. for today, i concentrate on the theme of banking sector consolidation. before i proceed, let me once more pay tribute to the committee for its many achievements over the years. in particular, i wish to once more commend my predecessor, chief ( dr. ) j. sanusi for the sterling achievements over the past five years. i also commend your contributions to our national economy - both in your individual capacities and in the context of your banks. i look forward to the continued cooperation of the committee. as time goes on, we may need to reappraise the frequency of the meetings of the committee. may be, beginning 2005 we could restrict the general meetings to say, three times a year ( that is, every