A Critical Review of the Effect of the Global Financial Melt-Down on the Nigerian Banking Sector

Abstract

This study seeks to examine the effects of the global financial crisis on the Nigerian banking sector in retrospect.  The shock waves that emanated from the global financial melt-down that started in 2007 are yet to fully dissipate. Beginning from the mortgage to stock market in the United States of America it quickly spread to other sectors and other European economies and then a global phenomenon. The effect of the financial crisis left the collapse of many industries in its trail, while the banking sector was the worst hit. To mitigate further collapse of the Nigerian banking sector, the Central bank of Nigeria (CBN) took several steps during and after the global financial crisis. These measures have repositioned the Nigerian banking sector and restored greater degree of public confidence. It was recommended among others that Nigerian banks should depend less on public sector deposits and diversify their products to become more robust in their operations.

Key words: Bank Consolidation, Financial melt-down, recapitalization.