Effect of Deposit Money Bank Failure on Economic Development of Nigeria, 2009-2019

Obi-Nwosu Victoria O; Chimarume Blessing Ubah; Chukwu, Kenechukwu Origin

Title:
Effect of Deposit Money Bank Failure on Economic Development of Nigeria, 2009-2019

Authors:
Chukwu, Kenechukwu Origin | Obi-Nwosu Victoria O | Chimarume Blessing Ubah

Cite This Article :

Chukwu, Kenechukwu Origin | Obi-Nwosu Victoria O | Chimarume Blessing Ubah "Effect of Deposit Money Bank Failure on Economic Development of Nigeria, 2009-2019" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5, August 2021, pp.2192-2204, URL: https://www.ijtsrd.com/papers/ijtsrd46285.pdf

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Abstract :
Deposit money banks plays a vital role in the in economy which involves providing capital for investment thereby improving the well being of the country as such collapse of any bank can affect the economic development of the country. Therefore the study investigated the effect of bank failure on economic development of Nigeria (2009-2019) using secondary data from Nigeria Deposit Insurance Corporation and Statistical bulletin of Central Bank of Nigeria. The research work used the Granger Causality techniques to test the effect between the independent variables (Nonperforming loans, Capital Adequacy Ratio and Liquidity Ratio) on the dependent variable (Unemployment Rate) while VAR was used to test the short run relationship. The study found that bank failure granger causes unemployment in Nigeria within the period of the study. The study therefore advocates that banks must ensure they maintain reasonable and acceptable shareholders fund unimpaired by losses at all times and avoid capital erosion. Every loan granted by each of the banks has to be adequately collateralized and the incidence of insider related credits must be deemphasized to avoid loan losses or huge non-performing loans. The regulatory authorities on the other hand should engage themselves in capacity building to enable them perform their supervisory and regulatory functions as effectively as possible. The CBN must continue to emphasize and enforce the prudential regulation.

Keywords :
Bank failure

Publication Details:

Unique Identification Number : IJTSRD46285

Published In : Volume-5 | Issue-5, August 2021

Page Number(s) : 2192-2204

Publisher Name : IJTSRD | www.ijtsrd.com | E-ISSN 2456-6470

Copyright © 2019 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by/4.0)

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