Bank recapitalization will help lower interest rates —Prof Adenikinju
THE Central Bank of Nigeria (CBN) directive has banks has recapitalize has has been describe as A move that will lead has A decline In interest rate.
THE projection was do by Teacher Adeola Adenikinju President Nigerian Economic Company In her paper title, "Bank Recapitalization And THE Macroeconomics In Nigeria", which he present has THE T2 2024 Association of Capital Walk Academics of Nigeria (ACMAN) symposium detained via Zoom.
Teacher Adenikinju declared that Bank recapitalization increase THE capital base of banks which, In turn improved their liquidity, And THE upper liquidity increase THE provide of money In THE economy.
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“Holding constant THE request For money In THE economy, THE real interest rate decline. THE autumn In THE real interest rate involve A autumn In THE price of loanable funds which provides A incentive For companies has borrow", he sharp outside.
He explain that THE result of THE above mechanism East A increase In AGGREGATE investment as more companies take advantage of THE relatively lower interest rate has borrow For their investment.
According to has him, "Given THE additive nature of investment In THE national income accounting, upper AGGREGATE investment led has A increase In THE AGGREGATE to go out Or income. »
He reiterated that Bank recapitalization will lead has increase bank liquidity climax has real interest rate autumn, And increase In AGGREGATE investment And increase In AGGREGATE exit.
"Base on THE theoretical chains of interest rate, exchange rate, Throw Q, THE wealth of shareholders, And THE balance leaf, bank recapitalization can be beneficial For THE banking sector And THE Nigerian economy as whole.
"THE improvement In capital adequacy, liquidity, bank assessment, ready, And investment can improve THE growth of to go out In Nigeria", Teacher Adenikinju further said.
However, he said there must be policy measures has prevent inflation And avoidable appreciation of THE Naira SO that Nigeria can maximize THE benefits of THE recapitalization.
In addition, he said banks must Also be encourage has develop ready through THE sectors of THE economy including THE perceived risk sectors as THE SMEs, agriculture, etc.
"Accomplished correctly, bank recapitalization can improve THE performance of THE financial sector with ripple effects on THE Nigerian economy that promote investment, consumption, And economic growth", he submitted.
He explain that THE prevailing macroeconomic challenges need THE recent move of THE Central Bank of Nigeria (CBN) has goodbye THE minimum capital requirements For Nigerian banks.
THE CNB on March 28, 2024 issued A note breeding THE minimum capital requirements For commercial, merchant And without interest banks In THE country, while Also giving existing banks two years has increase their capital In double with THE new requirements.
THE revealed new minimum capital requirements For banks, attached to THE minimum capital base For commercial banks with international authorisation has N500 billion.
He attached to THE new minimum capital base For commercial banks with national authorisation has N200 billion, while THE new requirement For those with regional authorisation East N50 billion.
THE new minimum capital For merchant banks would be be N50 billion, while THE new requirements For without interest banks with national And regional permissions are N20 billion And N10 billion, respectively.
ALSO READ: Olubadan-designate, Oba Olakulehin, assists First of all religious function after appointment
Keywords: Bank interests recapitalization rate
THE Central Bank of Nigeria (CBN) directive has banks has recapitalize has has been describe as A move that will lead has A decline In interest rate.
THE projection was do by Teacher Adeola Adenikinju President Nigerian Economic Company In her paper title, "Bank Recapitalization And THE Macroeconomics In Nigeria", which he present has THE T2 2024 Association of Capital Walk Academics of Nigeria (ACMAN) symposium detained via Zoom.
Teacher Adenikinju declared that Bank recapitalization increase THE capital base of banks which, In turn improved their liquidity, And THE upper liquidity increase THE provide of money In THE economy.
Related Posts
“Holding constant THE request For money In THE economy, THE real interest rate decline. THE autumn In THE real interest rate involve A autumn In THE price of loanable funds which provides A incentive For companies has borrow", he sharp outside.
He explain that THE result of THE above mechanism East A increase In AGGREGATE investment as more companies take advantage of THE relatively lower interest rate has borrow For their investment.
According to has him, "Given THE additive nature of investment In THE national income accounting, upper AGGREGATE investment led has A increase In THE AGGREGATE to go out Or income. »
He reiterated that Bank recapitalization will lead has increase bank liquidity climax has real interest rate autumn, And increase In AGGREGATE investment And increase In AGGREGATE exit.
"Base on THE theoretical chains of interest rate, exchange rate, Throw Q, THE wealth of shareholders, And THE balance leaf, bank recapitalization can be beneficial For THE banking sector And THE Nigerian economy as whole.
"THE improvement In capital adequacy, liquidity, bank assessment, ready, And investment can improve THE growth of to go out In Nigeria", Teacher Adenikinju further said.
However, he said there must be policy measures has prevent inflation And avoidable appreciation of THE Naira SO that Nigeria can maximize THE benefits of THE recapitalization.
In addition, he said banks must Also be encourage has develop ready through THE sectors of THE economy including THE perceived risk sectors as THE SMEs, agriculture, etc.
"Accomplished correctly, bank recapitalization can improve THE performance of THE financial sector with ripple effects on THE Nigerian economy that promote investment, consumption, And economic growth", he submitted.
He explain that THE prevailing macroeconomic challenges need THE recent move of THE Central Bank of Nigeria (CBN) has goodbye THE minimum capital requirements For Nigerian banks.
THE CNB on March 28, 2024 issued A note breeding THE minimum capital requirements For commercial, merchant And without interest banks In THE country, while Also giving existing banks two years has increase their capital In double with THE new requirements.
THE revealed new minimum capital requirements For banks, attached to THE minimum capital base For commercial banks with international authorisation has N500 billion.
He attached to THE new minimum capital base For commercial banks with national authorisation has N200 billion, while THE new requirement For those with regional authorisation East N50 billion.
THE new minimum capital For merchant banks would be be N50 billion, while THE new requirements For without interest banks with national And regional permissions are N20 billion And N10 billion, respectively.
ALSO READ: Olubadan-designate, Oba Olakulehin, assists First of all religious function after appointment
Keywords: Bank interests recapitalization rate
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