Banking Industry as a Central Nervous System of an Economy, the Role, Challenges and Prospects

Abstract

The study aimed at examining banking industry as a central nervous system of an economy with particular emphasis on its role and challenges in Nigeria. In achieving the objective of the study, the study adopted only secondary sources of data to present and analyse the information leading to its recommendations. The testing of hypotheses was done using regression analysis with SPSS version 17.0. The research discovered among others that, there is no significant relationship between loan default, insider abuse and bank distress and there is no significant relationship between unemployment, bank distress and Gross Domestic Product (GDP). These findings are
attributable to the fact that bank distress became a non-issue from 2005 to date while the other variables are still occurring in the banking sector. The research recommends among others that financial agencies should urgently compel all the banks management to address the weak corporate governance in order to correct the inaccurate reporting and non-compliance with regulatory requirements, falling professional ethics and de-marketing of other banks in the banking industry in Nigeria.