DEREGULATION AND THE BANKING CRISIS IN NIGERIA

Deregulation And The Banking Crisis In Nigeria



Synopsis

This paper describes the impact of impact of the global banking crisis on the flow of deregulation deals in Nigeria For this purpose, we have selected three projects in Nigeria which were being affected by the global banking crisis. A detailed study on these projects have been conducted through secondary research. The three selected projects are Oceanic Bank International (Nig) Ltd, Photovoltaic Modules and Afribank Nigeria Plc. A detailed description of these projects have been provided in three separate chapters. Further, this paper lends theoretical support to the plausibility of studies conclude that the empirical evidence does not convincingly demonstrate that capital regulations were a dominant cause of the banking crisis. As a corollary, our study further demonstrates that banking crisises cannot necessarily be eliminated by relaxing such capital regulations.

Table of Contents

CHAPTER 1: INTRODUCTION4

Aims & Objectives11

Hypothesis11

List of Key Terms11

Research Question12

2.1 Analysis of the G-20 Countries Meeting in 2009 in Nigeria17

CHAPTER 3: RESEARCH METHODOLOGY20

CHAPTER 4: FINDINGS22

Data Analysis of Global Trends and Outlook22

United Kingdom23

Europe25

Asia-Pacific Region26

Sector Trends and Outlook27

Global Syndicated Lending27

Manage Complex Commercial Projects and Banking Sector of Nigeria29

Analysing the Data relating Commercial Real Estate29

Small Business31

Commercial Lending's Role in the Subprime Crisis33

Analysing Data Regarding Deregulations in Banking Crisis of Nigerian Banks33

Nigerian Commercial Project Case Study 1: Oceanic Bank International (Nig) Ltd39

Oceanic Bank International (Nig) Ltd39

International Commercial Project Case Study 2- Intercontinental Bank Ltd48

Module Supply, Demand, and Price50

Recent Policy Changes54

Possible Impact of the Banking crisis56

International Commercial Project Case Study 3-Afribank Nigeria Plc60

Public money or private equity?62

ECA surge?68

CHAPTER 5: CONCLUSIONS69

Limitations and Recommendations72

REFERENCES79

APPENDIX89

Nomenclature89

CHAPTER 1: INTRODUCTION

According to the empirical literature, from 1990 through 2008, banking sector of Nigeria and many other Asian, European and African countries have face worst times. Especially deregulation and the banking crisis in Nigeria got attention in recent times. Nigeria had experienced supply-side crunches in parts of their credit markets. So had Japan in 2007 and 2008. Economic downturns typically witness a decreased volume of bank lending, often with nonprice rationing of credit—a phenomenon termed “banking crisises” or “financial crises”. Conversely, banks often expand their lending during macroeconomic growth phases by relaxing terms and standards. Such systematic switching between tight and lax lending standards over the business cycle has been observed in Nigeria and many other countires including Scandinavia, Germany, Mexico, Namibia, and Asia.

The causes of this regime switching have been widely debated. Researchers show how cognitive bias by lenders, including overweighting current information on the value of collateral, can lead to regimes of credit rationing, depending on prevailing financial conditions. Researchers show that managerial myopia can generate cyclical herd behavior as a type of market failure. Heterogeneity and private information in an overlapping generations economy can induce repeated switching between Walrasian regimes and regimes of credit rationing. Cyclical fluctuations in banks' use of the discount window may contribute to banking crisises. Heterogeneity in households' occupational choice or between tradable and nontradable sectors with bailout guarantees has also been suggested to trigger such ...