Banking regulation and supervision in Nigeria : an analysis of the effects of banking reforms on bank performance and financial stability

Wapmuk, SE 2017, Banking regulation and supervision in Nigeria : an analysis of the effects of banking reforms on bank performance and financial stability , PhD thesis, University of Salford.

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This study analyses the effects of banking regulation and supervision on the performance and stability of Nigerian deposit money banks (DMBs) over the period of 2000 – 2013. Research in the area of banking regulation and supervision has gained considerable attention since the episode of the global financial crisis that started in the second half of 2007. It is against the background that both international and national regulators are continuously introducing new rules and guidelines for banking institutions to ensure sound banking systems that this study analyses the Nigerian experience. On that account, the Nigerian banking sector went through two banking reforms in 2005 and 2009 and this study employs a mixed methods approach to ascertain the effects of the reforms on the performance of Nigerian deposit money banks. This thesis adopts the use of content analysis of interview responses to examine the initiatives employed by both Nigerian regulators and bank managements towards ensuring healthy banking practices. More so, the DEA window analysis is employed in this thesis to trace the efficiency level of individual deposit money banks through the 2005 and 2009 banking reforms and the global financial crisis. While multiple regression estimations are adopted to ascertain the effects of capital adequacy, asset quality, management quality, earning ability, liquidity, sensitivity to risk, bank size, and GDP on bank efficiency, bank performance, and financial stability. The results suggest that the two Nigerian reforms led to a general increase in the performance and efficiency of Nigerian DMBs. However, the 2005 banking reforms was unable to shield the Nigerian banking sector from the adverse effect of the global financial crisis. Additionally, evidence suggests that Nigerian DMBs recovered in the post-global financial crisis period in reaction to regulatory initiatives. The results also show that resolution techniques adopted by Nigerian regulators prevented the failure of several Nigerian DMBs during the global financial crisis. This also found that DMBs fortified their internal control practices in line with the 2009 banking to reduce the build-up of non-performing loans as it was the case after the 2005 banking reforms when there was excess liquidity. However, even as the reforms led to increased efficiency scores and performance, the results show that capital injections whether in the form of capital requirement increase or bailouts do not guarantee sustained efficiency and stability. To that end, this study recommended increased surveillance of DMBs and adoption of qualitative and statistical assessments of bank performance.

Item Type: Thesis (PhD)
Schools: Schools > Salford Business School
Depositing User: SE Wapmuk
Date Deposited: 19 Jan 2018 12:44
Last Modified: 27 Aug 2021 20:40

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