Financial Regulation Is Crucial For Economic Growth

By

ACKNOWLEDGEMENT

I would like to thank my supervisors, friends and family, without their support this research study would not have been possible.

DECLARATION

I adjudge that the entire content of this dissertation is entirely my own work; the content used in this dissertation has not been submitted before in any educational institution and represents my own opinion.

Signed __________________ Date _________________

ABSTRACT

The Regulation of the financial system can have a serious impact on the growth and stability of an economy. Financial institutions facilitate the investment we need to create growth in the economy and as such provides the framework for the activities of our wider economy. It is therefore essential that we regulate the financial services sector by constructing a stable process that will allow economic growth and The ability to achieve this lies in getting regulation right

The study will look at the regulation of banking and securities markets in Nigeria and compare it with the UK position. It will also look at legal components the provisions and legislations that govern this area. Given the important financial intermediation role of banks in an economy, their high degree of sensitivity to potential difficulties arising from ineffective corporate governance and the need to safeguard depositors' funds, corporate governance for banking organisations is great importance to the international financial system and merits targeted supervisory guidance in the broad sense of licensing, enforcement, sanctioning and crisis management and disclosure standard. It will also look at the role of government both national and internationally, the effect of EU regulation and the Basel committee on UK and the regional approach to financial regulation in Nigeria looking at ECOWAS and WAMZ.

TABLE OF CONTENTS

ACKNOWLEDGEMENTii

DECLARATIONiii

ABSTRACTiv

CHAPTER 1: INTRODUCTION1

Background of the Study1

Aims of the Study2

Objectives of the Study2

Purpose of the Study2

Rationale of the Study3

Research Questions3

CHAPTER 2: LITERATURE REVIEW5

Regulatory System for Economic Growth5

Appropriateness of Regulatory Framework5

Stability in Financial Sector fostering Economic Growth6

Effect of Stable Financial Sector on Economic Growth7

Comparison of Nigerian and UK financial System8

History of UK and Nigerian Financial Sectors10

Role of Supervisory Body14

Licensing15

Enforcement16

Sanctioning16

Protecting Depositors16

Issues in Security System of UK and Nigeria17

Insider Dealing18

Impact of Government Regulation on Financial Market in Nigeria and UK19

FSA in UK20

IOSCO in UK22

SEC in Nigeria23

International Regulatory Bodies25

Financial Crisis and Inadequate Regulatory Framework26

Role of Central Banks in Financial Crisis27

Role of Investment Banks in Financial Crisis29

Basel Committee31

REFERENCES34

CHAPTER 1: INTRODUCTION

Background of the Study

The topic of the study that is “financial regulation is crucial to that of economic growth is an important topic that has been discussed in the past with greater relevance. The two variables that are the economic growth and the financial regulation have long been studied within the past literature and evaluate the link between the two. The financial regulations greatly impact the economic growth within the countries and are largely affected by the nature of regulations implemented by the government of a certain country. The study discusses the financial system of the two economies that are the United Kingdom and Nigeria. The comparative analysis of the two financial systems have been performed by discussing the concepts of financial ...