Date of Award


Degree Type


University or Center

Clark Atlanta University(CAU)

Degree Name


International Affairs and Development Program


The Nigerian banking system is presently riddled with distress, insolvency, and failure. The system is passing through what might seem the roughest phase in its history. The present bank distress and insolvency have culminated in the failure of many banks. In an attempt to correct this unhealthy development, the regulatory authorities (CBN and NDIC) have devised and implemented many novel policies to check this drift. Despite their efforts, however, the cankerworm continues to eat deeper into the Nigerian banking system. This study seeks to identify significant factors that might explain Nigeria's banking system failure as perceived by bank officials, and to recommend ways to minimize bank failure in Nigeria. The banking authorities, to a large extent, focused on a single cause of bank failure, such as unprofessionalism on the part of bank personnel. The majority of those interviewed accused them of committing fraud. The study showed that during the era of bank deregulation, a wider array of factors might have contributed to bank failure. The factors identified in this study are as follows: 1. The acute shortage of experienced and seasoned banking professionals during the era of banking deregulation led to an increase of forgeries and other abuses. 2. The inconsistent and frequent changes in macroeconomic policies during the period under study have negatively affected other macro-economic indicators. 3. Some factors during the period under investigation led to some banks' inability to meet standards set by the CBN/NDIC in respect to: capital adequacy, asset quality, management profile, earnings strength, and liquidity guidelines. 4. Lack of central bank independence contributed to bank failure. This study is important because the proposed recommendations would be of interest to operators of the banking industry, to regulators in the industry, as well as to the Nigerian government in its efforts to chart a new course in the Nigerian banking industry in the twenty-first century.


Signature pages are on file with the graduate school. An archival copy of the document is available in the Archives Research Center.