Nigeria's president on Monday signed into law legislation creating an asset management company to soak up bad bank loans, central bank Governor Lamido Sanusi told Reuters. "Mr President has just signed the asset management bill into law. The law takes effect immediately," Sanusi said after attending a signing ceremony with President Goodluck Jonathan. The central bank has lobbied heavily for the establishment of the Asset Management Corporation of Nigeria (AMCON), which will buy up non-performing loans in exchange for government bonds in order to free up banks' balance sheets. With bad loans off their books, banks are more likely to resume lending in Africa's most populous country, where credit has been tight since last year's bail-out of nine poorly-capitalised lenders. Under the new law, the toxic assets would be exchanged for seven-year bonds or other debt instruments issued by AMCON and guaranteed by the finance ministry. AMCON's value will be 10 billion naira ($66.7 million).
