Already reports from the banks reveal that the inflated figures usually declared as value of total assets would shrink noticeably. A source at the First Bank who pleaded anonymity told NEXT, “You should expect shrinking in the total asset positions of the banks. That has already started to manifest in the industry.” The source added, ‘‘Whether or not the banks declare losses, the books would shrink. The same money people kept circulating and adding to their books would no longer be available. We were more than double counting the same money, and this was possible because the banks had different accounting year end. ‘‘
As I wrote in my column of today, Nigerian banking sector is corporate Nigeria. From the same Next report:
Another banker observed that, “The stock market would run into more trouble. About 60% of the market’s All Share Index (ASI) is controlled by banks. Listed securities are mostly banks. With this they would sell down. It means they would release more into the market and then prices would further go down. One thing is certain; the ASI would be further depressed.”
60%!? We have not started building a financial sector at all!