Banking consolidation in Nigeria was initiated and consummated by government fiat rather than through free market mechanism. Time constraint and other induced factors did not allow foreign (new) entry into the merger and acquisition process. Rather what pre-dominated the exercise was in-market capital base boosting and friendly mergers. This model may have a consequence on price expectations for both loans and deposits. Through analyses of market power in both the deposit and loan markets, this work hopes to investigate the impact of the banking consolidation exercise in Nigeria as it affects cost of financial intermediation. The methodology will involve a frontier baseline mark through Data Envelopment Analysis; and Error Correction Modelling. (By: Muhammad Auwalu Haruna Lecturer I, Department of Accounting, Ahmadu Bello University)
Friday, July 20, 2012
In-Market Consolidation Model and Cost of Financial Intermediation in the Nigerian Banking Sector
Banking consolidation in Nigeria was initiated and consummated by government fiat rather than through free market mechanism. Time constraint and other induced factors did not allow foreign (new) entry into the merger and acquisition process. Rather what pre-dominated the exercise was in-market capital base boosting and friendly mergers. This model may have a consequence on price expectations for both loans and deposits. Through analyses of market power in both the deposit and loan markets, this work hopes to investigate the impact of the banking consolidation exercise in Nigeria as it affects cost of financial intermediation. The methodology will involve a frontier baseline mark through Data Envelopment Analysis; and Error Correction Modelling. (By: Muhammad Auwalu Haruna Lecturer I, Department of Accounting, Ahmadu Bello University)
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