Credit Creation and Financial Instability in Nigeria

Babatunde Oloyede Binuyo; Ocharive Aruoriwo C.

doi:10.12816/0041194

Article Details

Credit Creation and Financial Instability in Nigeria

Authors:

Babatunde Oloyede Binuyo | Ocharive Aruoriwo C.

Publisher:

Sohar University

Main Topics:

Economics and Finance

Journal:

Oman Chapter of Arabian Journal of Business and Management Review 2017 Vol.6 Issue 12, pp.1-9

Document Type:

Article

Publication Date:

10/2017

Document Language:

English

Document ID (Org No.):

108898

Frequency:

Monthly

pISSN:

22235833

DOI:

10.12816/0041194

Descriptors:

Keywords:

Abstract:

 The study investigated “Credit Creation and Financial Instability in Nigeria”. It is argued that it iscredit creation that fuels bubbles, makes the system unstable and leads the economy into crises. Timeseries data collected from the Central Bank of Nigeria (CBN) Statistical Bulletin between periods of(1992- 2015) was used to regress the model using The Error Correction Model (ECM) technique. TheECM showed a short run and long run relationship in the model. The economy adjusts back toequilibrium at 59%. As the lending rate decreases, while money supply and loans to deposit ratioincreases, credit created to real estate increases. The implication of this is that an increase inspeculative credit causes a bubble and eventually a burst in asset prices leading to banking sectorcrisis where debtors are unable to pay back loans when due. The central bank should get moreinvolved, in form of enforcing credit-control, to restrict speculative credit creation.

Article Details

Credit Creation and Financial Instability in Nigeria

Authors:

Babatunde Oloyede Binuyo | Ocharive Aruoriwo C.

Publisher:

Sohar University

Main Topics:

Economics and Finance

Journal:

Oman Chapter of Arabian Journal of Business and Management Review 2017 Vol.6 Issue 12, pp.1-9

Document Type:

Article

Publication Date:

10/2017

Document Language:

English

Document ID (Org No.):

108898

Frequency:

Monthly

pISSN:

22235833

DOI:

10.12816/0041194

Descriptors:

ECONOMIC CONDITIONS

CREDIT CARDS

ASSETS

ECONOMIC STABILIZATION

PRICE STABILIZATION

NIGERIA

Credit Creation

Bubble

Asset Prices

Financial Instability

Issues

Article Details

Authors: Babatunde Oloyede Binuyo | Ocharive Aruoriwo C.

Publisher: Sohar University

Main Topics: Economics and Finance

Journal: Oman Chapter of Arabian Journal of Business and Management Review 2017 Vol.6 Issue 12, pp.1-9

Document Type: Article

Publication Date: 10/2017

Document Language: English

Document ID (Org No.): 108898

Frequency: Monthly

pISSN: 22235833

DOI: 10.12816/0041194

Descriptors:

Issues

Authors:

Babatunde Oloyede Binuyo | Ocharive Aruoriwo C.

Publisher:

Sohar University

Main Topics:

Economics and Finance

Journal:

Oman Chapter of Arabian Journal of Business and Management Review 2017 Vol.6 Issue 12, pp.1-9

Document Type:

Article

Publication Date:

10/2017

Document Language:

English

Document ID (Org No.):

108898

Frequency:

Monthly

pISSN:

22235833

DOI:

10.12816/0041194