The Effectiveness Of Monetary Policy On The Banking Sector In Nigeria

The Effectiveness Of Monetary Policy On The Banking Sector In Nigeria

Table Of Content

Chapter One

Preface.

Background of the study

Statement of problems

Purpose/ ideal

Significance of the study

Limitation of the study

Description Of Terms

Reference

Chapter Two

Review of affiliated literature

Reference

Chapter Three

exploration design and methodology

Source of data( secondary source only)

Limitation of data

system of data collection( literature work only)

Chapter Four

FINDINGS

CHAPTER FIVE

RECOMMENDATIONS AND

Conclusion.

CHAPTER ONE

preface

Monetary polices in Nigeria and the United Kingdom, the central bank of Nigeria and the bank of England act as counsels to the government over financial polices. The authorities take the final decision on the matters. In Germany, the discrepancy in the case because the German central, the bunds bank of Germany has a indigenous independence in setting the financial polices.

The central bank of Nigeria lender the civil ministry of finance( FMF), we’ve the central bank of Nigeria and this is the apex of the nonsupervisory institution of the Nigeria fiscal sector. The bank promotes and maintains financial stability as well as issuing sound and effective fiscal system in Nigerian. It issue legal tender i.e. currency note and coins in Nigeria and maintain Nigeria external reserve to guard the public value of legal currency. The CBN has the responsibility of formulating and enforcing the financial and exchange rate programs for Nigeria and numerous other functions that they perform in Nigeria.

The central bank of Nigeria has been suitable to excise its statutory power through its financial polices and experimental function in promoting financial and profitable stability. In Nigeria for illustration, by controlling the, quality and directions of credits, financial polices and optimum quality of plutocrat force has been maintained and this enhances the profitable stability. It development function encourage the establishment of necessary development bank and fiscal institutions wh8ich help the profitable development.

The effectiveness of any central bank hinges crucially on its capability to promote financial stability. Attainment of financial stability rest on the central bank, the capability to involve effective financial polices and to apply also efficiently. Nigerian bank and other bank were operated without nay control in their vacuity and force of plutocrat and rotation and this has brought an effect in our profitable development and also torture among banks. As time went further, the central bank of Nigeria decided to introduce a new policy called the financial policy in the banking sector and through the preface of that financial policy into banking diligence helps numerous banks and also in our frugality to stabilize the value of plutocrat.

The central bank of Nigeria introduces this policy with some instrument to the banking conditioning and similar instrument is as follows;

1. open request operation

2. Moral section

3. Legal reserve andetc.

So financial policy is a vital policy used by financial authorities to control the vacuity of plutocrat in rotation that will help both in our frugality and also in our banking sector.

STATEMENT OF PROBLEMS

It’s relatively clear that there has been a recorded progress made by the CBN toward resolving the linked structure imbalance in the banking operation( Akinni 1986) nonetheless, there have been still some problem as to the perpetration of the financial policy in the banking sector.

There’s the problem of effectiveness of financial policy as a tool of banking operation. Some of the tool to acess includes the reduction rate, legal reserve rate and open request operation and these tools are anticipated to

Meet up with the challenges of the abnormal and unlooked-for demand deposit for prepayment of their deposits.

Eloquent way of moping access liquidity for the credence of affectation.

To guide and direct the fiscal institution towards the kind of advancing polices pause.

To be effective and effective toward abridging the lending capability of bank in the frugality

PURPOSE AND ideal

The following are the reason for this study;

1. To make sue that the inflow of plutocrat equates with the overall banking conditioning

2. To change the position of plutocrat force from time to time in order to change the position of banking conditioning.

3. It’s design to requate and controls the volume cost and direction of plutocrat and credit in the banks

4. It’s design to call the bank to order by checking and abridging the high position of affectation in the bank.

Significance Of The Study

The study will be salutary to the following;

1. To the banking sector.

The study will help the central bank of Nigeria to appreciate the impact of its sweats toward the regulation of the banks through the instrument of financial policy. it’ll help the central bank to know it there are still laps current in the programs. It acts as a comparison between the different programs of different time thereby helping the central bank of Nigeria to decide on new measure to borrow.

2. To the government

The study will be of benefit to the government by helping also to formulate programs, which are harmonious with the general profitable trend – exertion current at any time.

3. To the fiscal institution

It helps the fiscal institution as the interposers of the central bank of Nigeria to check their part towards programs perpetration. It further help also to correct or to avoid their own crimes.

4. To the frugality in general

The study will be of immense benefit to the element of the frugality by helping each sector or section to make opinions in harmony with the being profitable trend at a time.

5. The product sector

This is the sector that bears substantially the burden of affectation due to the substantial increase in the cost of manufacturing. The study will thus enable it to acclimate its system of going and evaluation so as to reflect the change in the frugality.

6. To the foreign interest GNP

This design give the outside the occasion of knowing the working medium of the Nigeria fiscal system. It’ll also help him to know the value of public currency with respects to its purchasing power and the general profitable tread.

description OF TERMS

1. Apex bank

This refers to the central bank of Nigeria known as “ the bankers bank ”. It control the conditioning of other banks

2. Affectation

This is continuity rise in the general price position which beget the purchasing power of nominal plutocrat to fall, its rate it measured by consumers price indicator.

3. Consumer price indicator

A simple number showing how on the normal the price of a selects number of a named goods standing fairly to some grounded time price.

4. Monetary policy

This refers to the credit control measure espoused by the central bank of a country. It’s use to consume the force of plutocrat as an instrument of archiving the ideal of general profitable policy.

5. Balance of payment

This term define the trading stands of a particular country with another country with which it engages its trade

REFERENCE

The linked instrument imbalance in the banking sector( Akinni – 1986)

WhitmanD. an preface to financial policy( the free press New York. 1976)

The linked instructural imbalance in the banking sector( Akinni – 1986)