THE IMPACT OF CENTRAL BANK OF NIGERIA POLICY REFORM ON BANK PERFORMANCE STABILITY

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THE IMPACT OF CENTRAL BANK OF NIGERIA POLICY REFORM ON BANK PERFORMANCE STABILITY (A CASE STUDY OF CENTRAL BANK, UYO BRANCH)

CHAPTER ONE

1.0     INTRODUCTION

One of the principal functions of the central bank of Nigeria (CBN) is to formulate and execute monetary policy to promote monetary stability and a sound financial system in Nigeria. The central bank of Nigeria carries out this responsibility on behalf of the federal government of Nigeria through a process outlined in the central bank of Nigeria decree 24: 1991 and the banks and other financial institution decree 25, 1991.

In formulating and executing monetary policy the government of the central bank is require making proposal to the president of the federal republic of Nigeria who has the power to accept or armed such proposals. Thereafter the central bank of Nigeria is obliged to implement the monetary policy approved by the president (Ekezie 2002).

Managing an economic entails articulating a well-meaning strategy and devising various policies and measures that ensure efficient utilization of a national resource with a view to promote economic growth, employment and maintained domestic and eternal sector stability.

Macroeconomic management encompasses a number of components, which include fiscal, monetary, banking, external, and real sector policies. Consequently, policy effectiveness depends critically on the consistency and complimentary of these sectoral components consistent with this interrelatedness. Monetary and banking policy, measures are designed to provide an environment that is conducive to the achievement of both macroeconomic stability growth and development (central bank of Nigeria bulletin, 2003 vol.27).

The objective of this the project, therefore, is to appraise the roles of the central bank of Nigeria in the management of monetary and banking policies in pursuit of the objective of providing a conducive environment for both macroeconomic stability and growth.

1.1     PURPOSE OF THE STUDY

The purpose of the the study is to appraise the roles of the central bank of Nigeria in the management of monetary and banking policies in pursuit of the aims of providing a conductive environment for both macroeconomic stability and growth.

1.2     STATEMENT OF THE PROBLEM

The problem is how maintaining monetary stability and sound financial structure. In most market economies, the aim of promoting sound financial structure apart from the control of monetary, stock is to prevent systematic financial instability and equity of financial intermediation. Failures in the financial institution lead to a loss of confidence in the sector.

Therefore, the central bank of Nigeria is expected to provide appropriate bank performance stability to regulate and ensure confidence in the financial sector.

1.3     THE OBJECTIVE OF THE STUDY

The objectives of this study is as follows:

1.                    To examine the role of the Central Bank of Nigeria (CBN) in the management of monetary and banking policies.

2.                    To examine the impact of the Central Bank of Nigeria policy reform in the central bank of Nigeria Uyo branch.

3.                    To evaluate the extent to which this policy reform has the help in bank performance stability.

4.                    To examine the importance of reforming the central bank policy.

1.4     RESEARCH HYPOTHESIS/RESEARCH QUESTION

This study is designed to test the following hypothesis:

Ho:   There is no significant relationship between Central Bank of Nigeria financial management procedures and the performance of the financial system.

Hi: There is a significant relationship between the Central Bank of Nigeria financial management procedure and the performance of the financial system.

Ho:   The Central Bank of Nigeria (CBN) does not play a significant role in the management of monetary and banking policies reforms.

Hi:    The Central Bank of Nigeria (CBN) plays significant roles in the management of monetary and banking policy reforms.

In this study, answer would be given to the following research question like:

1.                    How effective is the management of monetary and banking policies by the central banking of Nigeria.

2.                    How do the activities of the central banking of Nigeria reform policy influence the banking stability in Nigeria?

3.                    To what extent does the central bank of Does Nigeria financial management procedure help to develop the financial sector?

4.                    To what extent do the central banks of Nigeria's financial management help to stabilize the economy?

5.                    What is the financial role of the central bank of Nigeria in the Economy?

1.5     SIGNIFICANCE OF THE STUDY

To student the result of the study, will serves as a reference point for future researchers. To government and employer, it is expected that the and of this study, there shall be updating in the knowledge within the framework of the central bank of Nigeria policy reform on the bank and how effective the central bank of Nigeria monetary policy is in managing our economy.

The finding and recommendation will be of great interest to interested parties that desire ways of enhancing efficiency in the financial system.

Report of the study also helps the researcher to fulfill the requirement for the award of national diploma in accounting.

1.6     LIMITATION OF THE STUDY

The problem, the the researcher encountered was that some officers were either too busy for interviews or cleverly avoided certain question for the fear that the information given might put their jobs in jeopardy. Those who responded to question tends to the make their answers to reflect what ought to be rather than what is this undoubtedly affected the quality and accuracy of information collected during the study. An as large population of staff were shy to respond, thus it was difficult to really get their opinion as regarding manpower development and it seems they do not really appreciate the importance of development. These difficulties not withstanding, the researchers made the concept the effort to ensure that the product was comprehensively carried out to meet the desire needs.

1.7     DELIMITATION/SCOPE OF THE STUDY

This research work aim at highlighting the impact of the central bank of monetary policy on the monetary policy on the management of Nigeria economy from the period of 2005 - 2010.

1.8     DEFINITION OF SOME TERMS AND ACRONYM

According to Ekezie (1992), he defined central bank functionally as a national (financial) an institution that traditionally possesses the monopoly of the issuance of legal tender, the is money in a country; is entrusted with the custody the cash reserves of the banking, system (that is function as a bankers banks) and acts as lender of last resort.

Monetary Policy: as put forward by lay, 1999 are those measures taken by the monetary authorities (Central Bank) to control the cost quantity and direction of credit to achieve national objectives.

CBN: Central Bank of Nigeria

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