Impact of Monetary Policy on Financial Risks in Nigerian Banking Industry

Abstract

The study examines how monetary policy affects financial risks in the Nigerian banking sector. The study's goal is to demonstrate the monetary policy's major influence and significance on credit risk, market risk, and operational risk. The study was conducted as a result of the issue that monetary policy would just raise market volatility and undermine its own credibility. The market would not contribute in any way to the successful implementation of monetary policy or the pursuit of price stability. The outlook for the economy and cost extensive have drawbacks. Hence, the direction of financial stability and price stability actions normally go in the same direction and contention between both branches is rather questionable. The study adopted a quantitative method research design only since the variables can be measured and quantified. The population of the study consisted of 24 deposit money banks in Nigeria. Secondary data were obtained from annual reports and statements of accounts of six banks. The sampled banks were selected using judgemental sampling techniques. The financial statement was analysed through Ordinary Least Square (OLS) regression analysis facilitated by applying Econometric views (Eviews). The reports were made based on the results of the tables. The finding revealed that monetary policy significantly impacts non-performing loans, equity prices and the number of employees. The study recommends that further research should be carried out using other banking sectors, such as microfinance and companies.