EFFECTS OF GLOBAL ECONOMIC MELTDOWN ON BANKING INDUSTRY IN NIGERIA (A CASE STUDY OF SKYE BANK PLC)
This research work is focused on the “Effects of Global Economic Meltdown on Banking Industry in Nigeria”.
This project work examines causes and implications of the global economic meltdown on Nigeria economy within the framework of a consolidated banking sector.
It investigates the ability of the Nigerian banking sector to withstand the challenges of the global economic meltdown in the face of the current crisis facing the banking sector.
The project work analyzed the concept of the global economic meltdown and it effect on the banking industry and the economy at large.
1.1 BACKGROUND TO THE STUDY
Recently, there is problem of global economic meltdown which has been one of the most significant economic shocks in the post war period. At its core, the crisis originated in credit markets in developed countries centered particularly in the United States, the United Kingdom and Europe but the fallout has had a significant effect on the activity in every country and region. As the crisis intensified, there was a large swing in the appetite of world financial markets for risk, and in their capacity to accept risk. The term “global economic meltdown” is a recognition of the globalize economy as we have today and has a great effect on virtually every sector of the economy.
It is very apparent that banks in Nigeria are not exempted in global crisis. There is trouble recently in the banking industry, after banks equity prices plummeted and more than 300 billion naira in unsecured loans given to investors got trapped in the stock market meltdown. However, the central bank of Nigeria (CBN) insisted that 24 banks were strong enough to withstand the global economic crisis.
As the topic of this effort is not specific about a particular country, efforts are made to look at the issue from a global perspective and was narrowed down to situation in Nigeria. Financial analyst are continuing to speculate on how Nigeria will fare in the current global economic turmoil because it is argued that the speed at which the national currency, the Naira is depreciating is the indicative of very rough times ahead. Origin of the phenomenon, causes, effects as well as useful recommendation are also included to garnish this presentation.
1.2 OBJECTIVES OF THE STUDY
The objectives of this study are to:
- Examine the meaning and the origin of global economic meltdown
- Highlight the causes of global economic meltdown
- Analyse the effect of global economic meltdown on Nigerian banking industry
- Proffer possible solutions that would improve the situation.