THE IMPACT OF CBN SUPERVISION AND REGULATION ON THE DEVELOPMENT OF FINANCIAL SECTOR OF NIGERIA
Abstract
The study examined the impact of CBN supervision and regulation on the development of the banking sector in Nigeria (2000-2018). The study was aimed at determining the relationship between capitalization requirements and the ratio of private credit to GDP; evaluating the nature of relationship between monetary policy rate and the ratio of private credit to GDP; ascertaining the extent of relationship between liquidity ratio and the ratio of private credit to GDP; and determining the relationship between maximum lending ratio and the ratio of private credit to GDP. The study was anchored on the regulatory dialectic theory. The development of the banking sector was measured using ratio of private credit to GDP. Secondary data were sourced and the ordinary least square regression analysis was used for the empirical analysis. The study concluded that there is a significant relationship between capitalization requirement and liquidity ratio on the ratio of private credit to GDP. The study also concluded that there is no significant relationship between monetary policy rate and maximum lending ratio on the ratio of private credit to GDP. It is recommended that government should employ other measures to support the monetary policy to improve credit creation. Also, government should adopt policies that help bank to improve on their development.
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