GLOBAL ECONOMIC RECESSION: ITS IMPACT ON THE BANKING INDUSTRY IN NIGERIA .
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
GLOBAL ECONOMIC RECESSION: ITS IMPACT ON THE BANKING INDUSTRY IN NIGERIA .
Chapter one
1.1INTRODUCTION
A recession is a long-term downturn in economic activity, often known as a business-cycle contraction. A recession is characterised by rising commodities and energy prices, as well as disruptions in the financial and capital markets.
As the theme implies, “global economics recession in banking industry,” the researcher intends to share his own understanding of recession. The term “recession” refers to a long-term slowdown in economic activity, often known as a business cycle contraction.
The first recession can be traced back to 1930, when the world economy underwent its most severe d ownturn. This ran from 1929 until 1931.It is hardly surprising that it is referred regarded as “the Great Depression of the 1930s.”
The current economic crisis has been given various names, including Economic Meltdown, Economic Depression, and so on. Whatever the moniker, it basically refers to a steady slowdown in global economic activity.
The most current one, which has expanded to other parts of the world, began in 2007 in the United States as a result of unregulated lending to subprime mortgages. The causes of this crisis are numerous and complicated, but they may be linked primarily to a variety of elements in both the housing and credit sectors that emerged over time.
Some of these include: homeowner inability to make mortgage payments, poor judgement by the borrower or lender, speculation and overbuilding during the boom period, risky mortgage products, high personal and corporate debt levels, financial innovation that distributed and concealed default risks.
During a recession, numerous macroeconomic variables change in similar ways: Gross Domestic Product (GDP), employment, investment spending, capacity utilisation, household income, and company profit all decline.
Indexes from various government and non-governmental organisations, such as the International Monetary Fund (IMF), the World Bank (WB), and the Central Bank of Nigeria (CBN), all tend to indicate and foresee an imminent and gradual slowdown in other wealthy countries, such as Britain. Africa’s emerging countries are not left out.
For example, the Central Bank of Nigeria recently issued a study anticipating a slowdown in economic development in 2010. It is therefore necessary to conduct an empirical assessment of the impact of the current global economic recession on the various sectors of the Nigerian economy, particularly the banking sector.
This will help to build a road map for rescuing the economy from catastrophic collapse. The researcher is particularly interested in the Nigerian banking sector, which is why the topic is The Global Economic Recession: Its Impact on the Banking Industry in Nigeria.
1.2 Statement of the Problem
The importance of the banking sector in the Nigerian economy cannot be overstated. Banks are part of the country’s infrastructure that facilitates development.
They undoubtedly aid in the transition from a subsistence economy to a cash crop economy by boosting both the use of money and trust in it. They offer a quick way for people to pay each other via cheques, as well as safe places to deposit money.
Furthermore, they contribute to development through their ability to offer loans. Undoubtedly, banks and other financial institutions, particularly commercial banks, play a critical role in intermediating funds between the surplus and deficit sectors of the economy, hence promoting the latter’s development.
However, because the banking sector is an intricate aspect of the economy, it does not operate independently. As a result, it is likely to be hit by a larger-scale economic disaster.
As a result, the motivation to scientifically research the repercussions of the current Global Economic Crunch on the banking sector stems from an understanding of the industry’s centrality to the Nigerian economy.
1.3 PURPOSE OF THE STUDY
The research will be done with the intention of determining the influence of the Global Economic Depression on the Nigerian banking industry, whether positive or negative.
The purpose of this research study is to investigate the influence of the current global financial crisis on the Nigerian banking industry.
The findings of this research study are likely to benefit Nigerian policymakers, bank management teams, and bank regulatory authorities in the following ways.
v To understand the primary causes of Nigeria’s financial crisis.
v Determine the extent to which the global financial crisis has affected the Nigerian banking industry and the economy as a whole.
v Identify potential solutions for mitigating the damage and preventing future occurrences.
v To understand the origins of the current global economic crisis.
v To assess the impact of the economic crisis on investor confidence, both locally and globally.
v Determine what steps must be taken to save the economy from its current state of collapse.
v To provide solutions to the problems stemming from the current economic crisis.
1.4 Significance of the Study
This research will be beneficial to all stakeholders and participants in the banking industry. The findings of this study will be particularly useful to bank regulatory agencies when developing and enforcing financial sector policies.
This research will add to the existing body of knowledge. It will attempt to push back the boundaries of existing discoveries on the problem while also adding to the solutions previously proposed by prior scholars in addressing the complexity caused by the global economic catastrophe.
1.5 RESEARCH QUESTION.
The researcher aimed to answer the following questions:
What influence does the Global Economic Recession have on Nigeria’s banking industry?
How does the current economic recession effect the banking industry?
How does the current global economic crisis affect the banking sector’s performance?
What was the state of banks prior to the global financial crisis?
What influence did the global financial crisis have on Nigeria’s banking industry?
What caused the crisis to expand to Nigeria’s banking industry?
Is the banking sector immune to the current Global Economic Crisis?
Can the banking industry assist Nigeria’s economy recover from the present global recession?
Ø How do CBN banking policies and regulations affect depression in the banking industry?
1.6 Research Hypotheses
Ho: The recent global economic recession has no impact on Nigeria’s banking sector.
Hi: The continuing Global Economic Recession has an impact on the Nigerian banking sector.
Ho: The Nigerian banking sector’s functions are unaffected by the recent global economic recession.
Hi: The ongoing global economic recession has an impact on the roles of Nigeria’s banking sector.
Ho: There is no correlation between the current economic downturn and the performance of Nigeria’s banking sector.
Ho: There is a link between the continuing economic slump and the performance of Nigeria’s banking sector.
1.7 Scope and Limitations of the Study
This research was mostly focused on the banking business. It will conduct empirical research to uncover the effects of the Global Economic Crunch on the industry’s performance and sustainability.
Though the emphasis was on the banking sector, other sections of the global and local economies were studied.
1.8 Definition of Terms
RECESSION: A general slowing in economic activity over a long period of time.
DEPRESSION: Same as above.
GLOBAL ECONOMY: This refers to the entire economy of many countries across the world.
ARM = Adjustable Rate Mortgages.
GLOBAL ECONOMIC RECESSION: This is a steady and continuous slowdown in the world economy.
MBS: These are financial products known as mortgage-backed securities sold in the US financial market.
ECONOMIC ACTIVITIES: These are the numerous activities that occur inside the economy, such as production, investment, consumption, and trade.
The term “macro-economy” refers to the overall economy.
MACRO ECONOMY VARIABLES: These include economic indicators such as output, capacity utilisation, employment, investment spending, household income, and corporate profit.
FINANCIAL MARKET: A market for short and medium-term finances.For example, banks.
CAPITAL MARKET: The market where long-term funds can be sourced, such as the Nigerian Stock Exchange (NSE).
SME: Small and Medium-sized Enterprises.
CBN (Central Bank of Nigeria)
IMF: International Monetary Fund.
Need help with a related project topic or New topic? Send Us Your Topic