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Modeling Bank Lending Behavior In The Period Of Global Financial Crisis

Author

Listed:
  • Ahmad Bello

    (Department of Accounting, Ahmadu Bello University, Zaria, Nigeria)

Abstract

One of the most important roles of banks is that of intermediation. In spate of global financial crisis, banks in Nigeria experienced credit crunch as a result of economic downturn, squeeze profit from economic sectors and high inflationary trend. In this paper, effort was be made to develop a statistical model that explains the behavior of banks in the period of the crisis. More importantly, the study seeks to established causal relationship between factors that affects supply of loans viz a viz rate of return, total deposits, and inflation rate. Using dynamics econometric analysis and ordinary least square regression techniques the results reveal that liquidity position proxied by total deposits has significant influence on the behavior of banks this contradicts REE framework. Secondly, global financial crisis significantly affects the bank lending behavior, however on contrary regulatory intervention has less influence on the behavior. The study is expected to yield an immense benefit to policy makers who strive to stimulate economic growth through monetary and cyclical regulatory policies

Suggested Citation

  • Ahmad Bello, 2012. "Modeling Bank Lending Behavior In The Period Of Global Financial Crisis," Journal of Global Business and Economics, Global Research Agency, vol. 5(1), pages 72-78, July.
    • Handle: RePEc:grg:01biss:v:5:y:2012:i:1:p:72-78
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    References listed on IDEAS

    as
    1. M S Mohanty & Gert Schnabel & Pablo Garcia-Luna, 2006. "Banks and aggregate credit: what is new?," BIS Papers chapters, in: Bank for International Settlements (ed.), The banking system in emerging economies: how much progress has been made?, volume 28, pages 11-39, Bank for International Settlements.
    2. Philip Turner, 2006. "The banking system in emerging economies: how much progress has been made?," BIS Papers chapters, in: Bank for International Settlements (ed.), The banking system in emerging economies: how much progress has been made?, volume 28, pages 1-9, Bank for International Settlements.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bank lending; Global Financial Crisis; total deposits; inflation rate & exchange rates margin;
    All these keywords.

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General

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