IDEAS home Printed from https://ideas.repec.org/a/sae/vision/v3y1999i2p8-17.html

Examining the Causes of Bank Failure in Nigeria since Deregulation: Some Empirical Results and Implications of the Policy

Author

Listed:
  • Ralph I. Ubegbunan

Abstract

This paper examines the causes of bank failure in Nigeria since the inception of the current financial deregulation and the implications of the policy. The analysis, at the theoretical level, suggests that the root of the present financial instability and bank failure can be traced to structural changes in the economy, social and political upheaval, inconsistencies in regulatory and macro economic policies and bank internal problems. However, the empirical evidence seems to suggest that the primary causes of bank failure in Nigeria are banks' internal factors, especially liquidity, profitability and asset quality measured by the level of credit risk in a bank's portfolio. This is not surprising, given that the data used are essentially cross sectional and that the internal factors are to a large extent a reflection of external influences identified in the theoretical analysis. However, it is surprising that credit policy, management quality and capital adequacy are found to be less significant determinants of bank failure in Nigeria.

Suggested Citation

  • Ralph I. Ubegbunan, 1999. "Examining the Causes of Bank Failure in Nigeria since Deregulation: Some Empirical Results and Implications of the Policy," Vision, , vol. 3(2), pages 8-17, July.
    • Handle: RePEc:sae:vision:v:3:y:1999:i:2:p:8-17
    DOI: 10.1177/097226299900300203
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/097226299900300203
    Download Restriction: no
    File URL: https://libkey.io/10.1177/097226299900300203?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. David C. Wheelock & Paul W. Wilson, 1994. "Can deposit insurance increase the risk of bank failure? Some historical evidence," Review, Federal Reserve Bank of St. Louis, issue May, pages 57-71.
    2. Robert B. Avery & Gerald A. Hanweck, 1984. "A dynamic analysis of bank failures," Research Papers in Banking and Financial Economics 74, Board of Governors of the Federal Reserve System (U.S.).
    3. James R. Barth & R. Dan Brumbaugh & Daniel Sauerhaft & George Wang, 1985. "Thrift institution failures: causes and policy issues," Proceedings 68, Federal Reserve Bank of Chicago.
    4. Vernon, Jack, 1973. "Financial Disintermediation in a Macroeconomic Framework: Comment," Journal of Finance, American Finance Association, vol. 28(4), pages 1029-1032, September.
    5. Pettway, Richard H & Sinkey, Joseph F, Jr, 1980. "Establishing On-Site Bank Examination Priorities: An Early-Warning System Using Accounting and Market Information," Journal of Finance, American Finance Association, vol. 35(1), pages 137-150, March.
    6. William R. Keeton & Charles S. Morris, 1987. "Why do banks' loan losses differ?," Economic Review, Federal Reserve Bank of Kansas City, vol. 72(May), pages 3-21.
    7. Coleen C. Pantalone & Marjorie B. Platt, 1987. "Predicting commercial bank failure since deregulation," New England Economic Review, Federal Reserve Bank of Boston, issue Jul, pages 37-47.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christophe Godlewski, 2004. "Excess Credit Risk and Bank’s Default Risk An Application of Default Prediction’s Models to Banks from Emerging Market Economies," Finance 0409028, University Library of Munich, Germany.
    2. Christophe Godlewski, 2004. "Modélisation de la Prévision de Défaillance Bancaire Une Application aux Banques des Pays Emergents," Finance 0409026, University Library of Munich, Germany.
    3. Christophe Godlewski, 2004. "Modélisation de la Prévision de Défaillance Bancaire et Facteurs Réglementaires Une Application aux Banques des Pays Emergents," Finance 0409027, University Library of Munich, Germany.
    4. Maghyereh, Aktham I. & Awartani, Basel, 2014. "Bank distress prediction: Empirical evidence from the Gulf Cooperation Council countries," Research in International Business and Finance, Elsevier, vol. 30(C), pages 126-147.
    5. Eugene A. Ludwig, 1996. "Bank management structure obsolescence," Proceedings 489, Federal Reserve Bank of Chicago.
    6. Diana Hancock, 1996. "Measuring the efficiency of financial institutions: the importance of choosing a frontier," Proceedings 502, Federal Reserve Bank of Chicago.
    7. Jane W. D'Artista, 1996. "What should regulators do in the age of money managers?," Proceedings 488, Federal Reserve Bank of Chicago.
    8. Edward W. Kelley, 1996. "The why, what, and how of bank regulation," Proceedings 487, Federal Reserve Bank of Chicago.
    9. Park, Sangkyun, 1995. "Market discipline by depositors: Evidence from reduced-form equations," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(35), pages 497-514.
    10. William James Adams & Elijah Brewer & Hesna Genay & Paula R. Worthington, 1997. "A Trojan horse or the golden fleece? small business investment companies and government guarantees," Working Paper Series, Issues in Financial Regulation WP-97-22, Federal Reserve Bank of Chicago.
    11. Mark S. Carey & Mitchell A. Post & Steven A. Sharpe, 1996. "Does lending by banks and finance companies differ?," Proceedings 508, Federal Reserve Bank of Chicago.
    12. J. S. Butler & Barry Schachter, 1996. "Improving value-at-risk estimates by combining kernel estimation," Proceedings 513, Federal Reserve Bank of Chicago.
    13. Zeineb Affes & Rania Hentati-Kaffel, 2016. "Predicting US banks bankruptcy: logit versus Canonical Discriminant analysis," Post-Print halshs-01281948, HAL.
    14. Robert S. Chirinko & Julie Ann Elston, 1996. "Banking relationships in Germany: empirical results and policy implications," Research Working Paper 96-05, Federal Reserve Bank of Kansas City.
    15. William J. Hanley & Karen McCann & James T. Moser, 1996. "Reconsidering regulatory standards for clearing and settlement systems," Proceedings 517, Federal Reserve Bank of Chicago.
    16. Sun, Junjie & Wu, Deming & Zhao, Xinlei, 2018. "Systematic risk factors and bank failures," Journal of Economics and Business, Elsevier, vol. 98(C), pages 1-18.
    17. Gillian Garcia & Matthew Saal, 1996. "Internal governance, market discipline, and regulatory restraint: international evidence," Proceedings 491, Federal Reserve Bank of Chicago.
    18. Gerald P. Dwyer & Iftekhar Hasan, 1996. "Suspension of payments and bank failures," Proceedings 515, Federal Reserve Bank of Chicago.
    19. James A. Leach, 1996. "The merits of Glass-Steagall reform," Proceedings 485, Federal Reserve Bank of Chicago.
    20. Zeineb Affes & Rania Hentati-Kaffel, 2016. "Predicting US banks bankruptcy: logit versus Canonical Discriminant analysis," Documents de travail du Centre d'Economie de la Sorbonne 16016, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:vision:v:3:y:1999:i:2:p:8-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.