Authors
Expertise
A banking system with capital deficiencies is undesirable for the Nigerian economy. Why? A bank primarily acts as an intermediary between depositors and borrowers – it accepts deposits and makes credit available for borrowers in various sectors of the economy, thereby driving economic activity. So, what would be the fate of the Nigerian economy if banks are unable to perform their role as financial intermediators due to an undercapitalized banking system?
INTRODUCTION
A banking system with capital deficiencies is undesirable for the Nigerian economy. Why? A bank primarily acts as an intermediary between depositors and borrowers – it accepts deposits and makes credit available for borrowers in various sectors of the economy, thereby driving economic activity. So, what would be the fate of the Nigerian economy if banks are unable to perform their role as financial intermediators due to an undercapitalized banking system? The severe implications on the economy would be catastrophic. An empirical study of the effect of financial stability on economic growth in Nigeria from 1993 to 2017[1] shows a clear relationship between financial stability and economic growth in Nigeria. This content seeks to connect the dots between bank capital and economic resilience in view of the Nigerian apex bank’s objective for the achievement of a N1 trillion economy in Nigeria.
Important Notice: The information contained in this Article is intended for general information purposes only and does not create a lawyer-client relationship. It is not intended as legal advice from Jackson, Etti, & Edu (JEE) or the individual author(s), nor intended as a substitute for legal advice on any specific subject matter. Detailed legal counsel should be sought prior to undertaking any legal matter. The information contained in this Article is current to the last update and may change. Last Update: October 1, 2024.
