Evolution of Policy in Nigerian Banking System: Lessons from Experience

Abstract

Crisis have pervaded the Nigerian banking system till date, despite government response. This implies that the banks are still wobbling in carrying out their statutory mandates like efficient financial intermediation, which in turn takes its tolls on economic growth and development in Nigeria. This paper attempts to provide information on banking crisis and policy response over the years and on whether the purposes of the policies had been achieved. The paper succeeded in examining banking crises and attendant policy responses in five phases: 1892 -1959, 1960 -1985, 1986-2003, 2004-2007, and 2008 till Date. The policy responses to banking crisis over the years came with challenges. A good example is the legal and litigation challenges which acted as a clog in the speed of dealing with bank failure. Despite the usefulness of the policy, banking crises still exist. The inability of policies to address what they had been designed to tackle, has been due to a number of reasons which include the unawareness of the link between banking system and real sector. There is therefore the need to have corresponding measures to address real sectors’ infrastructural problems as well as the measures to combat banking crisis.

Keywords: Evolution, Government Policy, Government Regulation, Banking Crisis, Nigeria.