Journal of Emerging Trends in Economics and Management Sciences: Home

Article Title:
Capital Regulation and the Performance of the Nigerian banks: Need for Review
by Oladejo, Morufu Oladehinde and Oladipupo, Abiodun. U

Abstract:
The banking sector in any economy serves as a catalyst for growth and development and is therefore so sensitive and sacrosanct to the economy in term of stability and growth that must not be let loose by the Government. It is not surprising in the light of this fact, that governments the world over attempt to evolve an efficient banking system, not only for the promotion of efficient intermediation, but also for the protection of depositors, encouragement of efficient competition, maintenance of public confidence in the system, stability of the system and protection against systemic risk and collapse. Economists differ on the level of government intervention in the economy, particularly on regulation imposed on the financial intermediaries. While some believe that many regulations are necessary in order to protect the depositor?s funds, other believes that the banks are over regulated. Therefore this paper seeks to explore various implications of capital regulation on the performance of the Nigeria banks with a view to proffer solutions to problems. The study adopts largely an exploratory methodology and submitted that though reforms of banks becomes necessary, there is a limit to which banks should be regulated on the issue of capital adequacy. The paper argued that consolidation arising from the recapitalization of banks brought about lots of problems that may mar the aim of the reform if not properly approached.

Keywords: capital regulation, recapitalisation, consolidation, Nigerian banks, capital adequacy

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