Macroeconomic Determinants of Bank Deposits in Nigeria

Abstract

The paper empirically examines the macroeconomic determinants of bank deposits in Nigeria using data covering the period between 1980 and 2010. It tries to analyze the effects of various macroeconomic indicators, on the performance of banks within the context of deposit mobilization of banks and its determinants. The parsimonious ECM result showed that in Nigeria, bank investment, bank branches, interest rate and the general price level are important determinant of bank deposit. The Vector Error Correction and Johansen cointegration test indicates a long run relationship among the variables and the ECM result showed a satisfactory speed of adjustment. It is thus recommended among others that both the banks and the monetary authorities should take these factors into serious consideration when attempting to improve the deposits of banks and this will go a long way in increasing aggregate investment.

Keywords: Bank Deposits, resources mobilization, macroeconomic determinants Vector Error Correction Model,