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Risk exposure and management in cross-border banking
No full textThe essence of this paper is to examine the concept and practice of cross-border banking; the risks inherent in the cross-border banking environment and to suggest ways of managing the risks (since risks by their nature cannot be eliminated)
Output, real exchange rate and interest rate response to excess liquidity in Nigeria.
No full textThis paper investigates the response of output, real exchange rate and interest rate to shocks to excess liquidity in Nigeria. The authors used structural VAR to estimate the model
Determination of interest rate Saharan African countries: a analysis.
No full textA major indicator of banking sector efficiency is interest rate spreads (IRS), which have been found to be very high in African countries. This paper analysed the determinants of interest rate spreads in Sub-Saharan African (SSA) from a macro perspective, that is, using aggregate banking sector data, and focusing macroeconomic and market determinants. The study used ex-ante measure of spreads, that is, differences between interest rates on lending and deposit. Using annual data covering 33 countries, the result to obtained from the paper suggested that different market and macroeconomic policy variables played significant role in explaining variation in IRS in the SSA region. The study showed that out of all the market determinants, only the scale variable and reserve requirement are of little importance in the determination of spread, while bank development is irrelevant. On the other hand, the macroeconomic variables, such as the extent of government crowding out in the banking sector; public sector deficits, discount rate, inflation level, and money supply, are much more significant in the determination of the IRS. This indicates that changes in IRS it SSA region respond more to changes in macro variables than to changes in market variables
Corporate governance of banks in Nigeria: determinants of Board of Directors\u27 effectiveness.
No full textThe paper seek to ascertain the characteristics that determine the effectiveness of the bank boards in carrying out its roles of monitoring and advisory. It suggests that empowering boards through incentive packages and enlarged responsibilities to monitor, sanction, reprimand would be a way forward for the Nigerian banking sector
Central Bank Nigeria Annual Report and Statement of Accounts for the Year Ended 31st December, 2009
No full textThe Central Bank of Nigeria (CBN) Annual Report and Statement of Accounts for the Year Ended 31st December, 2009 revealed that the country\u27s Gross Domestic Product (GDP) grew by 6.7% YoY, compared to 6.0% in the previous year. This growth was driven by the non-oil sector, with the non-oil GDP growth rate of 8.3%. Within the non-oil sector, the agricultural sub-sector grew by 6.2%, while the whole-sector and retail sectors recorded growth rates of 11.5 and 10.5 per cent, respectively. The robust output recorded during the previous three years was driven by the government\u27s optimism, which reflected in the oil price hike of 8.6 per cent, which boosted the growth in industrial challenges to the sector. However, this also highlighted the epileptic power supply, poor infrastructure, and poor financing. The inflation rate dropped steadily from the beginning of the year to 10.4% in September 2009, before resuming on upward movement to close of 12.0 per cent in December. The movement in inflation rate during the year reflected the effect of policy measures adopted, on the soybean prices in prices and food inflation. The external oil sector came under pressure in 2009, reflected in the decline of external reserves, reverse of capital inflows by portfolio investors, and lower tariff bond prices. The current account surplus was controversial, reflecting the diminution in earnings from crude oil exports. External reserves dropped by 20.0 per cent to US$42.4 billion at end-December 2009, which could support 17.7 months of imports but not the full number of imports. The Central Bank of Nigeria (CBN) reported its annual report and statement of accounts for the year ended 31st December 2009. The report included macroeconomic and social indicators, domestic output and prices, GDP at Gross Domestic Product (GDP), GDP per capita, gross national income, sectoral GDP growth, agriculture, industry, service, oil production, and capital
Cross-border banking: threat or opportunity to economic growth and financial stability
No full textCross-border banking was a major issue in economic growth and stability of the financial sector until banks became large in size, began to engage in international transactions directly from their home countries and later by establishing or acquiring banks across their borders, and the level of international activities of banks intensified through complex products that increased exposure to systemic risk and possible losses to the economy. There is evidence on both sides to the argument that cross-border banking is both a threat and an opportunity to economic growth and financial stability. This paper argues what must be done to ensure that the opportunities outweigh the threats
How much do trading partners matter for economic growth? by Vivek Arora and Athanasios Vamvakidis: a review
No full textThe paper is a review of the paper How much do trading partners matter for economic growth? by Vivek Arora and Athanasios Vamvakidis . The paper empirically examined the extent to which a country\u27s long-term economic growth was influenced by the economic fortune of its trading partners. The study used panel data for over 100 countries to see if trading partners\u27 growth had a strong effect on domestic growth. A strong relationship was found between the economic growth of a country and the economic conditions of its trading partners
The dominant channels of monetary policy transmission in Nigeria: an empirical investigation.
No full textThe paper aims at identifying the dominant channels of monetary policy transmission in Nigeria. The standard vector autoregressive methodology was adopted. The inferences from the study shows that the lending rate provides the strongest nexus for the propagation of monetary policy impulses in Nigeria
Workers\u27 remittances and financial sector performance: the Nigerian experience.
No full textThis study examined the direction and magnitude of remittances effect on .financial development in Nigeria. Using DMB deposit, credit, loan and liquidity to proxy for .financial development, and adopting a structural dynamic model, we found that workers\u27 remittances show a sign of positive effect on demand deposit, positive and significant effect on liquidity and positive and significant effect on DMB credit and loan. This implies that workers\u27 remittances in Nigeria are important drivers of financial deepening. Thus, effort at making saving attractive and reducing parallel market premium will unarguably raise the proportion of banked remittances and improve financial development
Determinants of demand pressure in Nigeria\u27s foreign exchange market: an empirical analysis
No full textThis study investigates factors that influenced the demand pressure in the foreign exchange market prior to the recent reforms. We examined the theoretical issues and empirically measured the determinants of the demand pressure in Nigeria’s foreign exchange market. We adopted a simple ordinary least square (OLS) to estimate the impact of exogenous variable on the dependable variable. We found from the empirical results that brand pressure was prevalent during the past period. From the literature, demand pressure m s attributed to a number of factors which include, among others, the high incidence of currency substitution arising from speculative trading, liquidity surfeit, high premium and inadequacy of reserves. After an exhaustive analysis n/ the regression result, it was observed that the degree of openness, treasury bills rate and information on current and past reserve level accounted for the frequent upsurge in the demand for foreign exchange in the market. Thus, the paper recommends the adoption of appropriate Nigerian treasury bills rate, building up of optimum reserves and effective utilization of available reserves, an improved export promotion strategy through export competitiveness as well as appropriate exchange rate policy as major instruments for curtailing demand pressure in the foreign exchange market