Overhauling the institutional structure of financial regulation in Nigeria: The unfinished reform

Abstract

In recent years there have been calls for reforms to the institutional structure of bank regulation in Nigeria. It is argued these reforms are needed in order to strengthen the banking sector so that it can continue to play a key role in boosting economic development in Nigeria. To this end, this article analyses different arrangements for the institutional structure of bank regulation and maintains that bank supervision should be retained within the central bank. It further advocates a total restructuring of the institutional edifice of financial regulation with the view that the Twin-Peaks approach to financial regulation is the most advantageous institutional structure for financial sector regulation in Nigeria. There are merits and demerits with each of the different institutional structures but the strengths of Twin Peaks make it the optimal institutional structure for financial regulation in Nigeria.