A system is described for generating electrode stimulation signals for stimulation electrodes in an implanted electrode array on a given side of a bilateral cochlear implant system. A pre-processor module processes an acoustic audio signal with a bank of filters to generate a set of band pass signals each corresponding to a band of audio frequencies associated with one of the filters. An automatic gain control (AGC) circuit performs a channel specific dynamic amplitude mapping of the band pass signals to generate a set of compressed band pass signals. The AGC circuit uses a bilateral multiplication matrix characterizing a lateral suppression network and having at least one non-zero coupling element from a contralateral side. A stimulation timing module extracts stimulation information from the compressed band pass signals to generate stimulation timing signals. A pulse shaper module develops the stimulation timing signals into electrode stimulation signals to the stimulation electrodes.
