As both local and foreign investors scramble to acquire or invest in the rescued banks, JOHN UWE writes that the CBN should fall back on the recommendation of Basel 11 and other cross-border regulations to make its choice of successful investors in the banks.

Introduction
THE Basel Committee on Banking Supervision has issued new report and recommendations on the cross-border bank resolutions operations. Mr Nout Wellink, chairman of the Basel Committee and the president of the Netherlands Bank said the recommendations will promote more orderly resolution of cross-border banks in order to reduce systemic risk and help banks to address the too-big-to- fail syndrome.
The report made 10 recommendations aimed at improving the failing of financial institutions that has cross-border activities. They fall into three categories-strengthening national resolution powers and their cross-border implementation, an indication that national authorities need to have powers to intervene sufficiently early.   
Secondly, is firm-specific contingency plan, which means that banks as well as key home and host authorities should develop practical and credible plans to promote resilience in periods of severe financial distress and to facilitate necessary rapid resolution.
According to the report, the plan is expected to ensure access to relevant information in a crisis and assist authorities’ evaluate resolution options. One of the lessons from the crisis was that the enormous complexity of corporate structure makes resolutions difficult, costly and unpredictable.
Thirdly, the report recommends risk mitigation through mechanism such as netting arrangements collateralization practices and the use of regulated central counterparties should be strengthened to limit the impact on the market of a bank failure..
The Basel Committee on Banking Supervision is a forum for cross fertilization of ideas by regulators of banks in various countries with the aim of coming up with a framework.

CBN’s push for cross-border regulation
Lamido Sanusi, governor of the Central Bank of Nigeria (CBN) met with African central bankers at the International Monetary Fund (IMF) conference that took place in Turkey late last year to find a way to build a regulatory framework for the continent. “I am concerned that we have got banks that are spreading across different African counties and while we sign MoUs with other regulators we don’t have an African framework for cross-border supervision,” Sanusi said.
”I think the Nigerians, the South Africans, the Ghanaians, the BCEAO (West African central bank), the Central African regulators can together build a framework that makes sure all banks that operate anywhere in Africa are closely regulated,” he added.
Such a framework would make it easier for Africa to deal with regulators such as Britain’s Financial Services Authority, the U.S. Federal Reserve and China’s Central Bank, he said.

Fresh Investors Interest in Rescued Banks
Following the crisis in the Nigerian financial sector, the CBN said mid last month that it had received interest from several potential bidders for stakes in some of the 10 Nigerian banks it is seeking to recapitalise following a $4 billion bailout last year.
Banking sources said the central bank’s advisers had set last month as deadline for potential bidders to register expressions of interest, a move to test the appetite for acquisitions as the regulator seeks to reshape Nigeria’s banking landscape.
Following the crisis in the Nigerian financial sector, South African, United States of American and United Kingdom banks are scrambling to acquire banks in the country. Standard Bank Group Ltd., Africa’s largest lender, says it’s looking at Nigeria for possible acquisition opportunities as a banking crisis in the West African country slashes valuations.  “The current situation in Nigeria does present opportunities, and we are watching developments with interest,” said Erik Larsen, spokesman for Johannesburg-based Standard Bank.
 He said Nigeria is a key strategic market for Standard Bank. The bank already operates in Nigeria through its controlling stake in Stanbic IBTC. Banking shares value dropped three weeks ago after Intercontinental Bank Plc and Oceanic Bank reported losses. According to Razia Khan, head of Africa Research at Standard Chartered Bank stated that rivals in the U.S., the U.K., South Africa and Nigeria will not be “blind” to buying opportunities in Nigeria following the losses and stock price declines.
The largest banks, she said, will probably still be Nigerian but, for South Africa, Nigeria offers a big prize. While South Africa has the appetite to do more in Africa’s second-largest economy, she added that foreign banks, such as Citigroup Inc and Barclays Plc, will also be watching.
She indicated that South African banks, in particular FirstRand, Absa and Standard Bank, have expressed a strong interest to acquire and further expand operations in Nigeria.
Louis von Zeuner, Absa Group Ltd.’s deputy chief executive officer, said the lender is “not involved in any discussions in Nigeria” and that having a representative office in the West African country is “adequate.” FirstRand Ltd., South Africa’s second-largest banking group, did not immediately respond to questions. The lender said on Sept. 15 last year that it is “keen” to participate in any consolidation.