IMPLICATIONS AND REMEDIES OF BANKING FAILURES IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF STUDY

Banks are generally recognized and accepted to be a body that play a catalytic role in the process of economic growth and development. In any society, they are the The brain of economic stimulation and growth. When there is bank failure in any economy, such economy is terribly affected. Bank are the holders of the bulk of the nations monetary supply. This is becoming increasingly so as the public awareness of the services of banks increase and as the physical presence of banks rises throughout the country. Because of the supply of money and credit needs, banks no doubt occupy of any country. According to Alashi S.O (1991). Empirical evidence exists which suggest a positive correlation between real economic growth and bank assets, and between money supply, bank assets and economic development. Banks failure and associated run on banks limit the ability of banks to create. Money, jeopardize the payment mechanisms and disrupt bank-lending activities (Nyong 1995).

1.2 STATEMENT OF THE PROBLEM

Every country attempts how to maintain a healthy financial system because of its impotence in economic growth and development of the bank failure in the society. There is bound to be a serious problem in that society. From the beginning of banking in Nigeria there have been serious crisis of bank failure in the industry. This no doubt constitutes a set bank in our quest for economic growth and development. Such a situation should not be allowed to continue. To this effect there is need to investigate the causes of bank failure as the logical step towards formulating realistic policy to arrest the trend.

1.3 PURPOSE OF STUDY

The purpose of this study is to focus attention on the problem of bank failure in Nigeria which is threatening to hamper the resumption of sustain economic growth and development of the Nigeria economy. To this effect the major objective of this study is to: 1- Identify the causes of bank failures in Nigeria.