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 The Nigerian Banking Industry for the past decades has witnessed series of Banking distress and subsequent failures. Banks that had been doing well suddenly announced large losses due to credit exposures that turned sour, interest rate position taken or derivate exposures that may or may not have been assumed to hedge balance sheet risk. In response to this, there is indeed urgent need for banks in Nigeria to devote enough attention to the management of financial risks in the Nigerian Banking Industry. The 1989 annual report and statement of account of NDIC revealed that classified loans and advances or bad debts amounted to 9.4 billion which contributed 40.8 percent of total loans and advances and 280 percent of shareholders funds” (Hall, 1991:8). It is the development of his nature that have led to the introduction of the CBN prudential guidelines for banks. Cooker (1989:115), observes that “the main function of a bank is the collection of deposits from those with surplus cash resources and the lending of these cash resources to those with an immediate need for them” in fulfilling this:  It must be easily understood  It must be permanent  It must be able to absorb losses These three features are expected to guide member countries, including Nigeria, in assessing instruments to be used in raising bank capital. The bottom line in the debt capital is a risk instrument for financing bank operations and should be discourage as much as possible. The Basel Committee on banking supervision also introduced the “New Capital Accord” which was implemented in 2007. The New Capital Accord required capital charges to be made for credit, market and operational risks. This is aimed at protecting depositors, consumers, and the general public against losses arising from bank fragility and failure (Umoh: 2005). Ever since 1988, captains of the Nigerian Banking industry have shown keen interest in improving the risk analysis, measurement and management capacity of firms in the banking sector. Recently risk managers of major banks came together in Lagos to form an organization named Credit Risk Association of Nigeria (CRAN). It is hoped that CRAN will offer them opportunities for networking on issues of bank risk management. Concerted efforts are also being made by captains of banking industry to reduce the risk exposure of banks in lending to borrowers generally but especially to commercial bank, which is traditionally prone to market and credit risk. Coincidentally to this activity, and in part because of our recognition of the industry’s vulnerability to financial risk, the Wharton Financial Institutions center with the support of the Slon Foundation, has been involved in an analysis of financial risk management processes in the banking sector. In the banking sector, system evaluation was conducted covering many of North America’s super regional and quasi money center commercial banks as well as a number of major investment banking firms. The Nigerian economy is increasing begin globalized by the deliberate government actions since July 1986 when the federal government began the implementation of the Structural Adjustment Programme (SAP). The SAP sought to deregulate and free the economy from government control with a view to allowing market forces determine the production and consumption decisions of economic agent within the country. The deregulation process which was accompanied by privatization and commercialization government enterprises, had far-reaching impacts on the entire economy. In particular, deregulation of interest rates affected bank lending to the real sectors of the economy. In more recent times, government adopted business consolidation strategies viz: merges, acquisitions and taken over as part of its efforts to facilitate the ability of firms in financial services industry to become global market Players. According to the governor of the Central Bank of Niger (CBN), business consolidation in the banking sector was to, among other things; make Nigeria banks complete favourably in the global financial market” and to generate a high capital base that “will provide banks with the resources to met the cost of compliance in the areas of credit and market risk management” (Soludo, 2005:98-99).

Project detailsContents
Number of Pages66 pages
Chapter one Introduction
Chapter two Literature review
Chapter three  methodology
Chapter  four  Data analysis
Chapter  five Summary,discussion & recommendations
Chapter summary1 to 5 chapters
Available documentPDF and MS-word format


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