Publication: Financial Intermediation in the Pre-Consolidated Banking Sector in Nigeria
Date
2007-06
ISSN
Published
2007-06
Author(s)
Hesse, Heiko
Abstract
This paper uses unique bank-by-bank
balance sheet and income statement information to
investigate the intermediation efficiency in the Nigerian
pre-consolidated banking sector during 2000-05. The author
analyzes whether the Central Bank of Nigeria's policy
of recent banking consolidation can be justified and
rationalized by looking at the determinants of spreads. A
spread decomposition and panel estimations show that the
reform of the banking sector could be the first step to
raise the intermediation efficiency of the Nigerian banking
sector. The author finds that larger banks have enjoyed
lower overhead costs, increased concentration in the banking
sector has not been detrimental to the spreads, both
increased holdings of liquidity and capital might have led
to lower spreads in 2005, and a stable macroeconomic
environment is conducive to a more efficient channeling of
savings to productive investments.
Citation
“Hesse, Heiko. 2007. Financial Intermediation in the Pre-Consolidated Banking Sector in Nigeria. Policy Research Working Paper; No. 4267. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/7f4a9b78-054c-5aef-9399-c2ae79d8db4a License: CC BY 3.0 IGO.”
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