CBN Flashcards
What is a central bank?
An independent national authority that conducts monetary policy, regulates banks, and provides financial services
What are the goals of a central bank?
Stabilize the nation’s currency, keep unemployment low, and prevent inflation
How is most central banks governed?
By a board consisting of its member banks, appointed by the chief elected official and approved by the national legislative body
What model was first established by the Bank of England?
A model where the central bank is aligned with the nation’s long-term policy goals while being free of political influence in day-to-day operations
What was the G. D. Paton Report?
An enquiry conducted between 1892 - 1952 to investigate banking practices in Nigeria, leading to the first Banking Ordinance of 1952
When did the Central Bank of Nigeria begin operations?
1 July, 1959
What did the Central Bank Act of 1958 establish?
The legal framework for the CBN to operate and regulate banks
What significant changes occurred in the CBN’s autonomy in 1997?
The CBN was brought back under the supervision of the Ministry of Finance
What was the purpose of the CBN (Amendment) Decree No. 37 of 1998?
To provide a measure of operational autonomy for the CBN to carry out its traditional functions
What is the current legal framework of the CBN?
The CBN Act of 2007
What are the main functions of the Central Bank of Nigeria?
Banker to the government, banker to other banks, managing debt, warden of national reserves, issuing legal tender, maintaining foreign exchange rates, strengthening banking structure, controlling credit, lender of last resort, clearing house for cheques, entertaining complaints against commercial banks, inhibiting low inflation, stabilizing exchange rates
Fill in the blank: The Central Bank of Nigeria is the only body that has the right to _______.
print or issue money notes
What does the CBN do as a warden of national reserves?
Keeps the nation’s reserve of gold and international currency and safeguards these reserves
What is the role of the CBN in managing government debt?
Advise on timing and size of new debt instruments, advertise for public subscription, redeem matured stock, pay interests and principals
True or False: The CBN has the authority to remove any manager or officer of a failing bank.
True
What does maintaining monetary stability ensure?
Ensures price stability, which is needed for money to perform its role of medium exchange and store of value
What is the function of the CBN as a lender of last resort?
Provide loans to banks on the verge of bankruptcy
Who currently serves as the Chairman of the Board of Directors of the CBN?
Mr. Godwin Emefiele
List the roles of the CBN in controlling and supervising other banks.
- Giving out licenses
- Inspecting bank accounts
What was the purpose of the Banks and Other Financial Institutions (BOFI) Decrees of 1991?
To strengthen and extend the powers of CBN to cover new institutions and enhance monetary policy effectiveness
Fill in the blank: The CBN introduced treasury _____ in 1960.
bills
What is one of the CBN’s responsibilities regarding exchange rates?
Maintain a steady hand on the rate of foreign exchange in the country
What does the CBN do as a clearing house?
Serve as a clearing house for cheques from other banks
What are the implications of the size of government debt that the CBN brings to the government’s attention?
The inadequacies of the budget and the implications of the size of debt
CBN ORGANOGRAM
The board of directors
The governors
The coprate secretariat
The development finance
The government department
The internal audit
Risk management
And strategy management
Then this is divided into four deputy governors
1- corporate services
*capacity development
*capacity communicator
*finance
*hunan resource
*legal services
*medical services
Procurement and support services
Security services
2 -economic policy
Financial market
Monetary policy
Research
Statistics
Trade and exchange
3-financial system stability
Banking supervision
Consumer protection
Financial policy and regulation
Other Financial institutions supervision.
4-operations
Banking and payment system
Branch operations
Currency operations
Information technology
Reserve management.
