The ‘Licensing Supervision of Banking Business Large Exposures to Counterparty or Group of Connected Counterparties’ directive caps bank exposure at 25 percent, limiting aggregate exposure and credit concentration. The directive obliges banks to submit monthly reports detailing exposures of counterparties that exceed 10 percent of the bank’s capital. The ‘Licensing and Supervision of Banking Business Exposure to Related Party’ directive sets rules about conflict of interest in the loan approval process. I believe NBE regulators are unnerved by the concerning findings revealed by the Financial Stability report a few months back. Abdulmenan argues the scenario could have been averted entirely if the NBE had been diligently carrying out its regulatory duties.

Source: Ethiopian News June 16, 2024 05:17 UTC