Current Issue:
February,
2019
Vol.
8(1)
Global Advanced Research Journal of Management and Business Studies (ISSN: 2315-5086) January 2018 Vol. 7(1), pp 031-037
Copyright © 2018 Global Advanced Research Journals
Original Research Articles
An Evaluation of Financial System Stability In Nigeria
Ini S. Udom1 and Eze, O. Richard2, Inim Victor E (Ph.D)3
1MacroView Consulting LTD, Abuja-Nigeria.
2Department of Accountancy, Banking and Finance, Ebonyi State University, Abakaliki.
3Head, International Training Institute, Central Bank of Nigeria, Maitama, Abuja.
Corresponding author Email: ezerich2014@gmail.com
Accepted 29 January 2018
Abstract
Financial System Stability has become a major macroeconomic policy objective in Nigeria partly because of the severe consequences of the previous episodes of financial crises in the country. This paper conducts an evaluation of stability in the system between 1997 and 2016 using the macro prudential approach. Using indicators of capital adequacy, asset quality and profitability, the analysis is conducted on a time series basis to highlight the strengths and vulnerabilities in the system during the review period. The indicators show that by the end of 2016, clear signs of impending crises had started to emerge in the system. The suggestions proffered for ameliorating such a crises include the moderation of inflation, close monitoring of the risk management framework of the banks and strict enforcement of corporate governance standards.
Keywords: Capital Adequacy, Profitability, Asset Quality, Stability, Recapitalization