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Bullion

Keywords

Bank distress, Bridge bank, CBN.

Abstract

A meaningful analysis of causes of bank distress and the options for resolution would probably need to be preceded by a brief discussion of the role of banks in an economy. This paper examines the meaning of bank distress, it presents a detailed discussion of the main causes of bank distress as they relate to Nigeria in particular, it provides a review of the literature on resolution options as well as an enumeration of resolution options adopted to address bank distress in Nigeria. lt's has been observed in the paper that while the general causes of bank distress appear to be uniform the contribution of each factor varies from country to country. Accordingly, it becomes imperative that resolution options to be applied should be dictated by the nature of the problem and the peculiarities of the affected banking system. ln the main, the way forward in achieving a stable banking system is for all parties concerned to contribute to a favourable banking environment. ln that regard, the operators should adhere strictly to the rules of the game, the regulatory authorities should enhance the supervisory capacity while the government should put in place enabling legal, macro-economic and political frameworks.

Author Bio

The author is a staff of Nigerian Deposit Insurance Corporation.

Publication Title

CBN Bullion

Issue

1

Volume

28

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