ABSTRACT
The crisis that has rocked the Global economy in the past few year has been nothing but of great interest to governments, experts and scholars in different fields of study worldwide. Several phrases have been used to describe the situation. Indeed names like; Economic Depression, Global Meltdown, Economic Downturn, Economic Recession, and Economic Crunch and so on are no strangers in both the local and international prints and electronic media and they all tend to describe the same phenomenon – a slowdown in economic activities globally.
Although, it all started in the United State of America with the sub prime mortgage crisis, it has continued to spread across Europe and other parts of the world with its adverse consequences. This crisis has led to the collapse of many banks and other international financial institutions and even rendered an entire nation bankrupt.
In Nigeria, the banking sector appears to have weathered the storm due to a number of factors amongst which include the fact that our financial system is not fully integrated into the world’s financial system. This however does not mean that the Nigerian economy is completely immune from the crises.
It is on this premise that the research was conducted, in order to find out the relationship between the present Global Economic Crisis and the performance of Nigerian Banks.
Structured questionnaires containing scale rated options were employed to get facts from a carefully selected audience. The following interested findings emanated from the analyses carried out.
Despite the crises, Nigerian banks still remain the best option to customers for maintaining cash deposits. Services such as: money transfer, customer service, facilitating of contracts through the provision of indemnities and guarantees, and promotion of exchange, through clearing and third party claims settlement are still being performed by the banks effectively and efficiently.
However, banks have become more careful in granting credit facilities which may have made bank credit more difficult to access. These have potent adverse effects on both the yearly results of banks and to SMEs who rely heavily on bank credits.
Some banks may have started showing signs of illiquidity amongst which are the five (5) banks that were recently affected.
In order to rescue the situation, the researcher has made the following recommendations; recapitalization, merger, take-over, acquisition and provision of guarantees for the interbank market by the CBN in order to restore the confidence of banks and the banking public.
Finally, it has been discovered that the overall effect of the current Global Economic Recession on the banking sector is potently adverse. The Chi-Square (X2) test was applied in testing the three hypotheses that were put forward and all three alternative hypotheses were accepted.
CHAPTER ONE
1.1 INTRODUCTION
Recession is a general slowdown in economic activities over a sustained period of time or a business cycle contraction. An increasing commodity and energy prices and a disruption in the financial and capital market characterize a recessionary economy. As the topic imply “global economics recession in banking industry the researcher intend to contribute his own knowledge on recession. The word “recession” is a general slowdown of an economic activity over a sustainable period of time or business cycle contraction. Historically, The first recession can be traced back to 1930 when the great economic down turn ever experienced in global economy took place. This lasted from 1929 to 1931.Little wonder why it is referred to as “the great depression of the 1930s
The current economic crisis have been tagged numerous name like; Economic Meltdown, Economic Depression and so on. Whatever name it is called, it simply means a gradual slowdown in economic activities globally. The most recent one, which has spread to other part of the world, started in 2007 in United State of America due to unrestricted lending to sub/prime mortgage. The reasons for this crisis are varied and complex, but largely it can be attributed to a number of factors in both the housing and credit markets, which developed over an extended period. Some of these include: the inability of homeowner to make their mortgage payments, poor judgment by the borrower or lender, speculation and overbuilding during the boom period, risky mortgage products, high personal and corporate debt levels, financial innovation that distributed and concealed default risks, During recession many macro economic indicators vary in similar ways, production as measured by Gross Domestic Product (GDP), employment level, investment spending, capacity utilizat
