Determinants of Banking Stability in Nigeria
CBN Bullion, Vol 43, No 2., 2019
14 Pages Posted: 10 Jun 2019 Last revised: 20 Aug 2019
Date Written: 2019
This study investigates the determinants of banking stability in Nigeria. Banking stability is crucial for economic growth and financial development. This study uses aggregate outcomes rather than individual bank performance to analyze the determinants of banking stability in Nigeria. Using aggregate outcomes allows us to focus on the changes occurring in the banking industry as a whole. The findings reveal that bank efficiency, the size of nonperforming loans, regulatory capital ratios, greater financial depth and banking concentration are significant determinants of banking stability in Nigeria. The findings have implications. One implication of this study is that bank supervisors should intensify its effort in addressing the nonperforming loans, capital adequacy problems issues in Nigeria. Also, bank supervisors should ensure that policies designed to improve the workings of the financial system are complied with.
Keywords: Bank Stability, Bank Performance, Bank behavior, financial stability, Nigeria, Bank Regulation
JEL Classification: G21, G28
Suggested Citation: Suggested Citation