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Do high customer bank deposits incite management fraud? Examining causes of management fraud in the Nigerian banking sector


  • ojeaga, paul
  • Ikpefan, o
  • Odejimi, Deborah


The study investigates factors that incite fraud in the banking sector in Nigeria, using times series data for fraud obtained from CBN data from 1998 to 2010. It was found that high bank deposit were primarily responsible for a high rise fraudulent occurrences in the Nigerian banking sector particularly management fraud, some other factors that were also jointly responsible for these occurrences include high interest rates, low commercial bank lending and poor oversight function by the Central Bank and other financial regulatory agencies. The method of estimation used in the study is the quantile regression estimation method which is a non parametric estimation method based on the premise that the sample median will tend to that of the distributional median, it presents some obvious advantages over OLS (ordinary least squares) estimates, since the results are robust in the presence of outliers and heteroscedastic errors in the response measurement and allows for the exploration of other central tendencies and statistical dispersion properties of the dataset Machando and Silva (2013). The results are robust even after controlling for presence of heterscedastic error in the response measurement as well re-sampling the dataset (conducted by the bootstrapped quantile regression technique). Further explanation is also provided for the implication of variables identified to drive fraud occurrences using kernel density estimation.

Suggested Citation

  • ojeaga, paul & Ikpefan, o & Odejimi, Deborah, 2013. "Do high customer bank deposits incite management fraud? Examining causes of management fraud in the Nigerian banking sector," MPRA Paper 53237, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53237

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    References listed on IDEAS

    1. Bengt Holmstrom & Jean Tirole, 1998. "Private and Public Supply of Liquidity," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 1-40, February.
    2. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 14-23.
    3. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Oxford University Press, vol. 51(3), pages 393-414.
    4. Foos, Daniel & Norden, Lars & Weber, Martin, 2010. "Loan growth and riskiness of banks," Journal of Banking & Finance, Elsevier, vol. 34(12), pages 2929-2940, December.
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    More about this item


    Bank deposits; fraud; investors perception; interest rates and quantile regression.;

    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance


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