The Nigerian Financial Crisis : A Reductionist Diagnosis

Abstract

The crisis in the Nigerian financial system from 2008 to 2009 triggered
an explosion of scholarly debates on the legal and institutional
inadequacies of the Nigerian financial regulatory system that contributed
to its inability to anticipate or prevent the financial crisis. Many of the
analyses however have yet to consider closely the part played by suboptimal enforcement of financial laws and regulations before the crisis
and how this created opportunities for the crisis.
This paper argues for a supervisory failure account of the
Nigerian financial crisis. It conceives this failure as an incidence of supoptimal enforcement of regulatory norms, induced by low or weak
regulatory accountability and which largely provides opportunities for a
financial crisis. Through a normative analysis of the indicators public
sector and financial regulation accountability, it demonstrates how the
crisis could have been prevented. In doing so, the paper partly examines
the legal and institutional problems of financial regulation in Nigeria;
how the Nigerian financial system fared during the financial crisis of
2008 to 2009; and what could have been done to prevent the crisis.