THE IMPACT OF FINANCIAL LIBERALIZATION ON THE PERFORMANCE OF DEPOSIT MONEY BANKS (DMBs) IN NIGERIA, 1975-2013

📄 Project Abstract

In a number of developing countries of the world the financial system is highly regulated. This is because of the pivotal position the financial industry occupies in these economies. An efficient system, it is widely accepted, is a sine qua non for economic growth and efficient functioning of a nation's economy. Thus, for the industry to be efficient, it must be regulated in view of the failure of the market system to recognize social rationality and the tendency for market participants to take undue risks which could impair the stability and solvency of their institutions. However, the highly controlled state of the financial system in developing countries pulled the private sector back from playing an active role in the economy. The government controlled the interest rates and credit ceilings, owned banks and other financial institutions, and framed regulations with a view to making it easy for the government to acquire financial resources at a low cost. Since the nominal interest r...