Basel Implementation in Nigeria

How the Implementation of the Basel Accords Is Changing the Culture of Nigerian Commercial Banks

Abstract

Globalization has been making it essential for drastic changes to take place according to the need of the people in the sector of banking across the globe. The regulations of banking within the industrial countries that are developed have been increasingly focusing on achieving financial steadiness. Chapter 1

Introduction

1.1)Introduction: In this paper we will be examining the need that resulted in the implementation of Basel Accords is changing the culture and dealing of the banking sector in Nigerian Commercial Banks. Where the first part will be focusing on offering the introduction for the study that will identify the problem statement including the purpose, aims and object and research questions. The second part of the study will provide a literature review by different author's perception on the significant study and the third part will provide the methodology for the study that will demonstrate the way the research had been carried out. Globally, the financial and banking system have been witnessing surprising modifications over the previous three decades. Due to this fact globalisation has developed the necessity for radical alteration within the sectors of banking across the regions. Therefore, the ruling of banking within the countries that are industrially developed have been increasingly paying attention of achieving financial steadiness, depending on the expenses of regulation for the purpose of achieving equity and growth objectives. These were followed by the Latin America ruler default within the Banking supervision of 1988 Basel Committee.

1.2)Background: It has been observed that financial sector of Nigeria have been performing well in the implementation of Basel I and it is all ready to set its implementation towards the Basel II for making sure that improved risk management is taken over for the betterment of the region's banking system. The significant purpose of the Basel I is to pay attention to the risks related to credit excluding the operational risks, which is developed by creating a direct link among the credit risk and capital of the bank. Whereas the risk determined through Basel I is not capable of expressing the number of risks that the banks are able to go through. Basel II has the capability of addressing the gap through developing capital management and rigorous risks needs designed for making sure that the bank is capable of maintaining capital reserves adequate for its exposure towards risk.

The financial sector of Nigeria has been performing well in the implementation of Basel I. The Basel I and Basel II were drafted in the year 1988 and the year 2004 correspondingly that has created ways for renewing the cooperation of international banking. These Basel Accords are the one of the significant contracts in the present international finance. Mutually these accords have been useful in terms of standards of capital adequacy, regulation, banking supervision and harmonising across the economics of international market by technical and qualitative focus. The various researchers have proved their point that Basel II ...