Restructuring the Regulator

Seth Apati

Chapter 3 in The Nigerian Banking Sector Reforms, 2012, pp 35-55 from Palgrave Macmillan

Abstract: Abstract Before 1983, the Nigerian financial system was, or appeared to be, sound and stable. However, as the oil boom declined and foreign debt increased (largely due to the poor management of the oil earnings in the 1970s), the military regime succumbed to pressure from the IMF and the World Bank, under its recommended Structural Adjustment Programme (SAP), to correct the problem of ‘an inadequate number of licensed banks’ (Stein et al. 2002). Unfortunately, no deliberate strategy was employed to strengthen the supervisory capacity of the Central Bank of Nigeria (CBN). This conceptually plausible but contextually naïve theory of the World Bank resulted in the military regimes in Nigeria selectively pursuing financial liberalization measures while creating moral hazards through their numerous agents in the financial system.

Keywords: Exchange Rate; Monetary Policy; Central Bank; Foreign Exchange; Commercial Bank (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-30535-9_3

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DOI: 10.1057/9780230305359_3

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