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.