Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
Impact of the Global Financial Crisis on Nigerian Banks
Yusuf Bashir Maiwada
This study examines the impact of the global financial crisis on Nigeria Banks.
Part of the specific objectives of the study are; to assess the impact of financial
crisis on the share price of banks and examines the impact of financial crisis on
the capital adequacy of the banks, a total of 10 banks were randomly sampled
from the 23 banks in the country. Analysis of variance and Scheffe multiple
comparison test were used in testing the hypotheses. The result showed that
there was significant difference in mean of average monthly share price of
Nigerian banks, where the lowest mean was found to be during the post
recession period. Based on this finding, it was concluded that the country only
started feeling the impact of global financial crisis after it has already started in
the developed and advanced economies of the world. It was further
recommended that there is an urgent need for total overhaul of regulations and
regulatory framework of the Central Bank of Nigeria.
Keywords: Globalization; Financial Crisis; Nigerian Banks
1. Introduction
The world economies were used to financial crisis in varying degrees. From the late
1920s to early 1930s the world economies were in a major depression. During this
period, there was stoppage of capital that flowed in most economies and capital
repatriation was the order of the day (Amedu, 2010). This was considered the greatest
economic recession in which far reaching decisions were taken especially in the
developed economies of that time. From this period up till late 1960s, there were
economic challenges specific to different countries but not threatening to the
international financial system. The economic crises of early 1970s happened to be the
major economic disasters that shocked the world to it foundation which compelled the
international financial system to change from the fixed exchange rate system to the
floating exchange rate. These crises have their roots in local and international macroeconomic policies being pursued by the different countries and international financial
institutions as at that time.
The recent crisis which is based on the sub-prime mortgage lending, among other
causes, can be traced to the United States of America (U.S.A) in 2007, (Amedu, 2010)
which like wild fire quickly spread to world economics of both developed and developing
nations. This economic meltdown affected all sectors of economies of nations, with the
financial sector worst hit. Banks being the centre point of economic activities were the
major casualties. In Nigeria, the capital market was enjoying its best of times. All the
_________________
Dr. Yusuf Bashir Maiwada, Accounting and Finance Technology Program, School of Management
Technology, Abubakar Tafawa-Balewa University Bauchi, Nigria, Ph.: +2348034480338,
E-mail: surfirm@yahoo.co.uk
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
market indices were pointing in the positive direction with the Nigerian Stock Market
emerging as the world best performing stock market in 2007 with a return of 74.73%
(Amedu, 2010). The banks were enjoying a good run, with their share prices soaring
very high and their recapitalization mostly oversubscribed.
Okereke (2007) observed that the banking subsector of the stock market recorded
impressive performance; funds were flowing in from foreign sources to take advantage
of the good times in the market especially the banking sub sector. Suddenly, everything
took a dive for the worst. All market indicators were going down, price of share were
falling, and new offers were not coming on board and instead of new capital coming in
to the country from foreign sources capital repatriation was the order of the day
(Okereke, 2009). The market experienced capital flight. All these coincided with the
global financial crisis which happens to be a time when both the developed and
developing economies were facing economic challenges of varying degrees. The major
point of integration of the world‟s economy is the financial sector (Sanusi, 2010). Banks
despite being the most regulated are also the most vulnerable, since they provide the
mechanism of financial integration of economies. Soludo (2009) explained that Nigerian
banks accounted for over 90% of financial system assets and dominated the stock
market. Oteh (2010) reported that at its peak in 2008, the Nigerian banking sector made
up more than 60% of total equity market capitalization. But, by the end of 2008, the
banks share price were falling, banks were running to the Central Bank of Nigeria (CBN)
to access its discount window (Sanusi, 2010).
The coming of the global financial crisis has ushered in a lot of challenges in the
Nigerian Capital Market. This has manifested in the form of falling share prices, capital
flight among other factors. Within the financial sector, a well functioning banking sector
is regarded as the bedrock of a stable financial system. The financial sector in Nigeria
was in disarray, due mainly to the global financial crises as exemplified by the
happenings in the capital market. The extent of the challenges can better be viewed
from the banking sector since it link the global economy with that of the country. The
banking sector is the most regulated due to the growing internationalization and
globalization of banking operations which was accelerated by deregulation, technology
and globalization of banking processes and operations, which has increase the
potentials for risk in the sector. According to Sanusi (2010), Nigeria like many
developing countries particularly in Africa, did not feel the initial impact of the crises
because Nigeria was not a major player in the global economy. He stated that the
banking system was less integrated with the global financial market and the sound
macroeconomic policies adopted by the country helped to cushion the effect of the
crises, in addition, the banking system operated with simple financial products, but had
strong capitalization as a result of the recapitalization exercise of 2005. However, as
the recession in advanced countries deepened, Nigeria became affected as evidenced
by some Nigerian Banks that showed serious liquidity strain and had to be given
financial support by the Central Bank in the form of expanded discount window in
October, 2008 (Sanusi, 2009). This study therefore aims at identifying the actual period
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
that Nigerian banks felt the impact of the financial crisis. The study is limited to Nigerian
banking industry, specifically the following commercial banks; First Bank, Zenith Bank,
GTB, IBTC, Union Bank, Intercontinental Bank, Eco Bank, Fidelity Bank, Diamond Bank
and FCMB.
1.1 Scope of the Study
This study only focuses attention on the commercial banks in Nigeria operating under
the universal banking licence. The Nigeria banking industry has been in existence for
more than 100 years and has undergone a lot of changes from an unregulated era, to
regulated arm chair banking era. With deregulation of the economy, the banking
industry entered the era of aggressive marketing which was borne out of the stiff
competition in the industry. Universal banking and consolidations in the industry brings
about an unprecedented mergers and acquisition, which has currently defined the
banking landscape in Nigeria. Most of the banks are public limited companies and are
active participant in the stock market. Some of the banks have set up subsidiaries in
close African countries in order to broaden their African reach.
1.2 Significance of the Study
The study will assist policy makers in taking timely actions or decisions on banks in
times of future crises and also to put in place measures of early warning detection
system. A lot has been written on the global recession on the Nigerian financial sector
as a whole, but little efforts have been put in place in terms of research on the impact of
the recession on the banking sector as a centre piece of the financial institutions. This
study bridges that gap and provides a basis for further research.
1.3 Objectives of the Study
The main objective of this study is to assess the impact of the global financial crisis on
banks in Nigerian. The specific objectives of the study are to: (i) assess the impact of
financial crisis on share price of banks (pre during and post the crisis periods; (ii)
evaluate the impact of financial crisis on capital adequacy of banks (pre during and
post the crisis); (iii) evaluate the impact of financial crisis on asset quality of banks (pre
during and post the financial crisis); and (iv) assess the impact of financial crisis on
liquidity ratio of banks (pre during and post the financial crisis).
1.4 Hypothesis
The following hypotheses were formulated in line with the research objectives:
a) H0: There is no impact of the global financial crisis on the share price of Nigerian
banks.
b) H0: The global financial crisis has no impact on the banks capital adequacy.
c) H0: The global financial crisis has no impact on the asset quality of the banks.
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
d) H0: The global financial crisis has no impact on the liquidity level of the banks.
2. Literature Review
Globalization is seen as the linking and integration of the world in to a single village. It is
the existence of a global society where economic, political, environmental and cultural
events in one part of the world readily affects people in other parts and is the aftermath
of advancement in communication, transportation and information technology among
others (Okeke and Onuorah 2010). Hausler (2002) defined globalization as the
increasing liberalization and integration of economies in terms of trade and investment,
which has transformed financial and capital markets during the past two decades. Baliro
and Ubide (2000) were of the view that globalization of finance is associated with
deregulation of banking activities within particular countries and consolidation of
institutions and bank mergers that cross national borders. Leyshon (1995) shows that
liberalized financial markets are not necessarily efficient and may increase inequalities
in access to and distribution of financial resources. Adei (2004) also argues that
globalization is not working for the benefits of the majority of Africans. Further, while
globalization has increased opportunities for economic growth and development in
some areas, there has been an increase in the disparities and inequalities experienced,
especially in Africa.
2.1 Financial Crisis
A financial crisis is a sudden wide-scale drop in the value of financial assets, or in the
financial institutions managing those assets (and often in both). A financial crisis may be
triggered by a variety of factors, but the situation is typically aggravated by negative
investment sentiment, fear or panic. A financial crisis often sparks a vicious circle where
an initial decline sparks fear by investors that other investors will pull their money out
leading to redemptions and increasing declines. Financial crisis is applied broadly to a
variety of situations in which some financial institutions or assets suddenly lose a large
part of their value, (Adamu, 2010). Sanusi (2010) is of the opinion that it is a moment
when financial networks and markets suddenly become markedly unable or strained to
the point where it may collapse. Eichengreen and Portes (1987) have defined it as a
sharp change in asset prices that lead to distress among financial market participants.
Eichengreen (2004) noted that it is not very clear where to draw the line between sharp
and moderate price changes or how to distinguish severe financial distress from
financial pressure. This has remained a major challenge to economies and financial
expert alike. Before the arrival of the current global financial crisis, a lot of scholars in
the field of economics and finance have predicted the impeding economic doom.
Notably among them was Minsky (1995) who was cited in Whalen (1999) to have noted
that “Global financial integration is likely to characterize the next era of expansive
capitalism. The problem of finance that will emerge is whether the financial and fiscal
control and support institutions of national governments can contain both the
consequences of global financial fragility and an international debt deflation”. Similarly,
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
Warburton (2003, pp.165) reported that “Despite the Basel Capital Accord of 1988 and
its planned successor, Central banks have effectively abdicated their roles as guardians
of the credit and financial system. They have retained a role as trouble-shooters, and
lifeboat providers, as shown in the rescue of Long Term Capital Management (LTCM) in
1998, but have lost the ability to influence the overall quality of private sector credit
decisions, their well known commitment to preventing the perverse effect of
emboldening risk-takers to take even larger risk”.
Pettifor (2003) explained that as part of the financial sector expansion and growing
dominance, it has fuelled and expanded credit. This has helped to create a vast “credit
bubble” which has in turn, financed bubble in assets, stocks, shares, property and
dot.com companies. The easy availability of credit encouraged consumers, corporations
and governments to run up huge debts. Greenhill (2003) on his part opined that the
huge growth in the finance sector and the abrogation of control by governments over
the supply of credit have not happened by accident. Rather, they are the result of
deliberate policy decisions of governments, particularly in the west. Financial
globalization has taken place because it is the interests of a small elite of politically and
economically dominant people who have done extremely well out of it while ordinary
people have found themselves increasingly indebted. While the freedom to innovate has
led to the rapid development of the financial markets in major industrialized countries
and emerging markets, it has become clear that there is an inherent danger in the
manner the markets were developing without proper supervision and moderation
(Sanusi, 2010).
2.2 Causes of the Current Global Financial Crisis
There are many causes of the current global financial crisis, which to a large extent
were interwoven into each other. Stiglitz (2009) opined that the great recession of 2008
is both complex and simple. In some ways beneath the complexity of Credit Defaults
Swaps (CDS), sub-prime mortgages, Collaterized Debt Obligations (CDO), and a host
of new terms that have entered the lexicon is a run of the mill credit cycles. Argouleas
(2008) enumerated the causes of the crisis as: breakdown in underwriting standards for
subprime mortgages; flaws in credit rating agencies; assessments of subprime
residential mortgage backed securities and other complex structured credit products
especially CDO and other Asset Backed Securities (ABS); risk management weakness
at some large U.S and European financial institutions; and regulatory policies, including
capital and disclosure requirements that failed to mitigate risk management weakness.
2.3 Contagion Effects
Contagion effects refer to the idea that financial crises will spread from one institution to
other institutions or from one country to other countries which is based on some
underlying linkages. Adamu (2009) observed that the world economies are integrated
financially. Dudley (2010) opined that this financial crisis has exposed how important the
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
inter connections are among the banking systems, Capital markets and payment and
settlement systems. Minsky (1995) said that global financial integration is likely to
characterize the next era of expensive capitalism. The level of contagion will depend a
lot on the level of economic integration with the outside world and level of economic
deregulation. These will have direct bearing on the level of development, economic
exposure and insulation of the domestic market from the vagaries of the international
economy. Sanusi (2010) summed it up that cross-border spillover intensified after the
crisis started because financial institutions and markets across borders were closely
linked and risks highly correlated.
2.4 The Nigerian Financial System
The financial system of any country provides the catalyst through financial
intermediation for productive activities to ensure economic growth and development.
Thus, the state of any economy is often a reflection of state of its financial system. This
correlation cut across the globe, being true in developed and developing economies
alike (Olowe, 2008). Akinsulire (2008) added that the financial system consist of
financial intermediaries, financial market, financial institutions, rules, conventions and
norms that facilitates and regulate the flow of funds through the macro-economy. The
financial system is controlled by the government through the agencies of the Central
Bank of Nigeria (CBN), which supervises the activities of financial intermediaries and
monitors adherence to government‟s monetary and fiscal policies. The major types of
financial intermediaries are commercial banks operating under universal banking
license finance institutions, insurance companies, credit and saving institutions, micro
finance institutions, investment trust, mortgage institutions and pension fund institutions.
Sere-Ejembi (2008) observed that the stock market is a channel through which national
economies received foreign capital flows that make their tendency towards the global
economy easily visible.
2.5 The Banking System
The Nigerian banking system comprises of the CBN been the apex bank, controlling the
whole of the country‟s financial system, the commercial banks operating under the
universal banking license (but with plan for reform by the CBN into specialized banks)
and micro finance institutions. The CBN was established by Act of 1958 and
commenced operation on July 1st 1959. The Act which has undergone some
amendments was re-enacted as the CBN Act No. 24 of 1991. In addition, banks and
other financial institutions Act No. 25 of 1991 was also promulgated. The two Acts with
amendments up to 1999 gave CBN more flexibility in regulating and supervising the
banking sector and licensing finance companies which initially were operating outside
any regulatory framework. The CBN is the sole and principal regulator and supervisor in
the money market as well as in the activities of specialized and developed finance
institutions (including banks) and companies in Nigeria.
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
3. Methodology
The research design for this study is longitudinal design, an attempt is made by the
researcher to study variables over a span of time (years) in order to observe changes.
Olayiwola (2007) noted that a longitudinal research is a study where a particular group
or sample is studied over an extended period of time. He stated further that it involves
data gathering on same sample at different points in time. Alemayehu (2001) defined
longitudinal research as the continuous long term study of an area or variable. This
study made use of data from the selected samples of banks financial statements and
monthly average share price from 2005 – 2010 obtained from the Nigerian Stock
Exchange, this form the focal point of the study. The population of the study is made up
of all commercial banks with a universal banking licence in Nigeria within the study
period numbering twenty-three (23). A sample size was obtained using the formula of
Israel, 1992, at 95% confidence level and 10% level of precision. Data was sourced
from the Nigerian Stock Exchange in order to get the weekly average share price of the
sampled banks and also the financial statements of banks where used to calculate
asset quality, capital adequacy and liquidity ratios of the sampled banks. The analysis of
variance usually referred to by the contraction Anova was used in testing for all the
hypothesis of this study. While at the same time Scheffe multiple range test was used to
test the results of the F test to determine actually where the difference lies in the periods
under study for the research hypothesis where required. A statistical analysis package
commonly known as SPSS (Statistical Packages for Social Science) was used in testing
required for the study.
4. Findings and Discussion
The finding of the study shows that the first hypothesis was tested using Anova and
then the result of the different periods are tested again by using the Scheffe Multiple test
range to determine the actual period when the crisis hit the banking industry. The
second hypothesis was tested using capital adequacy ratios for the periods under
review, Anova test was carried out. Capital Adequacy Ratio: (The standard as set by
BOFIA is 10%, while the international standard is 8% BASEL). The third hypothesis was
tested using asset quality of the banks review, Anova test was also carried out. Asset
Quality Ratio: (Should not be less than 20%). The fourth hypothesis was tested using
liquidity ratio under review, Anova test was also carried out. Liquidity Ratio: (40% is
the standard while 20% is problematic). Source: Aborode, 2010. The entire hypothesis
where composed based on the period of the recession period in the following order.
Pre-recession period
2005–2006, during recession period, 2007 – 2008, post
recession period, 2009 – 2010.
Hypothesis one:
H0: There is no impact of the global financial crisis on the average share price of
Nigerian Banks.
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
Table 1: ANOVA Table for Average Monthly Share Price For Pre, During and Post
Recession
Between groups
Within groups
Total
Sum of squares
Df
26652.261
81965.827
108618.088
2
717
719
Mean
squares
13326.131
114.318
F
116.571
P
.000
The table shows that the probability P is 0.000 which is less than the significant level (α
= 0.05). Therefore the null hypothesis is to be rejected indicating that there is significant
difference between the mean of the average share price of the 3 periods under study.
Table 2: Scheffe Multiple Period Comparison
I)period
Pre
Post
During
Post
Post
Post
j)period
Mean difference
*
During
-11.17754
*
2.94783
*
11.17754
*
14.12537
*
-2.94783
*
-14.12537
Pre
Pre
Std.error
Sig.
.97604
.97604
.97604
.97604
.97604
.97604
.000
.011
.000
.000
.011
.000
95% confidence
interval
Lower
Upper
Bound
-13.5716
-8.7834
.5537
5.3419
8.7834
13.5716
11.7313
16.5195
-5.3419
-.5537
-16.5195
-11.7313
*The mean difference is significant at the 0.05 level
From table 2, the mean difference of all the 3 periods under review where compared,
i.e. pre, during and post recession to ascertain where the difference actually lies. There
is significant difference between pre recession and during recession, as well as post
recession. There is also significant difference between during and post recession
periods.
All the above tests imply that there is significant difference in the periods under study.
Table 3: Scheffe Period Ranking
Period
Post
Pre
During
Sig.
N
240
240
240
1
9.8093
Subset for alpha = 0.05
2
3
12.7571
1.000
1.000
23.9347
1.000
Means for groups in homogeneous subsets are displayed.
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
a. uses Harmonic mean sample size = 240.000
b. The group sizes are unequal. The harmonic mean of the group sizes is used.
The table shows that the 3 means of the periods under study are in different subsets
which further emphasis that they are significantly different from each other. The ranking
shows that post recession periods has the lowest mean with 9.8093, followed by the pre
recession period with a value of 12.7571, while during recession had the highest mean
with a value of 23.9347.
Hypothesis two:
H0: The global financial crisis has no impact on the Nigerian banks capital adequacy
ratio
Table 4: A Test of ANOVA on Capital Adequacy Ratio of Nigerian Banks for Pre,
During and Post Recession Periods
Between
groups
Within groups
Total
Sum
squares
52.249
9519.149
9571.398
of
Df
Mean squares
F
P
2
57
59
26.125
167.003
.156
.856
The P value of 0.856 is greater than α =0.05, indicating the acceptance of the null
hypothesis.
Hypothesis three
H0: The global financial crisis has no impact on Asset Quality Ratio of Nigerian Banks.
Table 5: A Test of ANOVA on Asset Quality Ratio of Nigerian Banks for Pre,
During and Post Recession Periods
Between groups
Within groups
Total
Sum
squares
489.715
8274.576
8764.291
of
Df
2
57
59
Mean
squares
244.857
145.168
F
1.687
P
.194
The P value of 0.194 is slightly greater than the α value of 0.05, indicating the
acceptance of the null hypothesis and implying that there is no significant difference
between the variables measured for the periods under study.
Hypothesis four
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
H0: The global financial crisis has no impact on the liquidity ratio of Nigerian Banks.
Table 6: ANOVA Table for Liquidity Ratio of Nigerian Banks for Pre, During and
Post Recession Periods
Between groups
Within groups
Total
Sum of squares
Df
822.256
28961.733
29783.988
2
57
59
Mean
squares
411.128
508.101
F
.809
P
.194
The P value of 0.194 is greater than α value; 0.05, indicating that there is no any
significant difference between the periods under review. From hypothesis one, there is
difference in the means of the period under study, which is the average monthly share
prices of the banks sampled. The post recession period (2009 – 2010) shows the lowest
mean, followed by the pre recession period (2005 – 2006) while during recession period
(2007 – 2008) showed the highest mean. This basically coincided with the period of
boom experienced by the banks in terms of appreciation of their share price. The post
recession period shows the sudden continual fall in the share price of the sample banks.
From hypothesis two, the global financial crisis has no impact on the Capital Adequacy
of banks sampled for all the periods, since there is no any significant difference among
the mean of the periods under review. Hypothesis three also shows that the global
financial crisis has no impact on Asset Quality of the banks since there is no any
significant change in the mean of the periods under review. Lastly, hypothesis four show
that the global financial crisis has no impact on the Liquidity Ratio of Nigeria banks
since there is no any significant difference in the periods under study.
The analysis shows an increase in the mean from pre recession to during recession.
This is due to the fact that the Nigerian economy is not sophisticated and has a low
level of linkage with the developed global financial set up. This is in line with the position
of Malik et al, (2009) that the financial institutions in the developing countries have not
been affected by financial crises in developed countries due to usage of traditional
financial system. Sere- Ejembi, (2008) also posited that with the comparative
shallowness of the financial sector of African economies, including Nigeria, and the
illiquid capital markets, the system is weakly linked to the international financial system.
She also stated that the Banks inactivity in the derivative market and varied residual
controls on capital accounts contributed to some insulation from severe contagion
effects as witnessed in advanced countries. The Scheffe test also reveals that during
the recession period, the mean was highest which collaborates with the claims of
Amedu, (2010), that the Nigerian stock exchange emerged as the best performing stock
market in 2007 with a return of 74.73%. The market continued on the bullish ways until
mid 2008 when the market began to feel the impact of the recession, and banks being
the most active sectors where not left behind. By December 31st, 2008, the stock market
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Proceedings of 8th Annual London Business Research Conference
Imperial College, London, UK, 8 - 9 July, 2013, ISBN: 978-1-922069-28-3
earned the unenviable record as one of the worlds‟ worst performing stock markets after
losing about 5.7trillion naira in market capitalization and 46% in the Nigerian Stock
Exchange All Share Index (Amedu, 2010).
The Scheffe test lastly indicated the post recession period has the lowest mean,
signifying the actual time when internal and external factors contributed to the fall in the
shares of Nigerian banks. The external factors are the divestment by foreign investors in
the stock market, of which the banking sector is one of the most active and highly
capitalized, the drying up of further credit lines to the bank from international sources
and the further fall in international trading activities witnessed globally. While on the
other hand, the internal factors include; the issue of the margin loans granted by the
banks to local investors, large exposure to the oil and gas sectors of the economy, over
priced and overvalued stocks, where the stocks were far above their fair market value
considering the basic economic fundamentals, and weak banking regulation regime.
Also panic selling of shares by local investors could account for the sharp decrease in
share price following recession.
5. Conclusion and Recommendation
This study concludes that the global financial crisis was not felt by Nigerian Banks until
after the immediate impact had been felt by the advanced and developed countries. It
was only after the recession period that the banking sector of the economy started
feeling the impact of the recession due to both internal and external factors earlier
mentioned. The main cause has been paucity of funds to the banking sector (Sanusi,
2009). This study also proffers the following recommendations which are hoped will
form panacea for the issue at stake. There is need for the regulatory authority to device
new means of early detection of distress signs in the banking industry. The regulatory
authority should enhance its remedial programmes to fix the core causes of crisis in the
banking industry. The improvement, enhancement and total implementation of risk
based supervision of banks to conform to the global best practice. There is an urgent
need for the total overhaul of regulations and regulatory framework, in order to enhance
both the on –site and off-site examination and supervision of the banks. There is the
need for increased and enhanced provisions for consumer protection. There is also the
need for the provision of a third tier capital by the Government where a bank has been
discovered to have a marginal or terminal distress problem. The stock market regulators
should try and find ways of minimizing speculation in the market and make sure that
economic and market fundamentals are keys to share price appreciation.
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Proceedings of 8th Annual London Business Research Conference
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