It was Thomas Doe Nah, Managing Director of CENTAL, the Center for Transparency and Accountability in Liberia, who once remarked, “John Davis entered the Liberia Bank for Development and Investment (LBDI) running.”
The occasion was the passing of the torch from Francis A. Dennis, Jr. as LBDI President to John Davies, whom the bank’s Board of Directors had chosen to succeed Mr. Dennis.
What did Doe mean? He was also among the new entrants whom the bank had chosen several years ago to join the staff. But very early on he sensed that this fellow new entrant, John Davies, approached the job with an extraordinary degree of purpose and zeal that Doe figured were absent either in himself or in any of the other new entrants.
Well, a few years later the government recognized John Davis’ talent and zeal, pulled him away from LBDI, naming him Comptroller General at the Ministry of Finance. And when the Board felt it was time to choose a new LBDI head, it brought Davies back to head LBDI.
Today, LBDI’s onshore and offshore cash position stands at US$53 million, while its balance sheet grew by 17% last year.
President Davies told a press conference Tuesday that the “minimum liquidity ratio set by the Central Bank of Liberia (CBL) is 15%. LBDI’s liquidity ratio at December 31, 2013, however, was 47%, reflecting a liquidity surplus of 32%.
CBL’s “capital adequacy ratio (CAR) reqirement” is 10%. CAR means the amount of capital required to cover risk. But the CAR of LBDI is 19%, meaning it is 9% in excess of the minimal capital requirement.
But why expose these vital LBDI statistics at this time?
It is because two local newspapers attempted to cause fear and panic in the banking sector, especially LBDI, by publishing what appeared to have been “planted” articles on last Monday morning, January 13, 2014, by spewing out some misleading figures about LBDI’s financial position.
LBDI’s president, John Davies, felt compelled to act swiftly. As would all good leaders, he immediately approached the Chairman of his Board of Directors, Finance Minister Amara Konneh, and convinced him that the LBDI had to make an urgent clarification, stating the bank’s true financial position, to avoid a “run on the bank.” These newspaper articles seemed determined to do just that, by stating that LBDI was “insolvent.” Insolvency is an anathema (disgrace, scandal) to any bank in the world; for that could cause depositors to rush to take their money out before the bank goes completely broke!
The Finance Minister agreed and LBDI issued a statement on Tuesday evening, setting the record straight. But John Davies felt that was not enough. On Tuesday he held a press conference in which he outlaid LBDI’s true position, which indicated that it was in far healthier shape than the two newspapers had suggested.
The CBL, the regulator of the banking industry in Liberia, too, felt compelled to act. In Wednesday’s Daily Observer, CBL issued a forthright statement declaring, “The CBL hereby informs the public that LBDI is liquid, solvent and sound.”
“The CBL’s financial soundness indicators show that LBDI’s liquidity ratio is 47% – 32% above the minimum 15%; the capital adequacy ratio is 19% – 9% above the minimum capital requirement. The bank’s reserves with the CBL collectively are more than US$40 million. Against this background, it is quite obvious that the story about the Government of Liberia writing to the CBL to loan LBDI US$7.5 million is untrue, baseless and malicious.”
CBL concluded its statement by emphatically stating its own financial position: “The CBL has at its disposal the requisite resources which, in its capacity as lender of last resort, could provide a cushion for any bank should there be a liquidity crisis.”
What does this tell us as media and media practitioners? It tells us that no media institution can afford to lay prostitute to any individual or institution that wishes, for unknown or whatever reason(s) to malign another individual or institution. To do that is to violate the ethics of our noble profession, which dictate that FACTS ARE SACRED, and that WE MUST, BEFORE GOING TO PRESS, GET THE OTHER SIDE OF THE STORY.