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Abstract
This study investigates the Financial regulations in reducing systemic risk amongst
deposit money banks in Nigeria, spanning 10 years from 2015 to 2024. The ex-post facto research design was adopted for this study. The population of this study consists of the 24 listed Deposit Money Banks licensed to operate in Nigeria. A simple random sampling technique was adopted to select 5 banks categorized as domestic systemically important banks (D-SIBs) from the 24 licensed banks, enhancing the generalizability of the findings. Using the panel regression model analysis, the findings reveal that financial regulations such as capital adequacy ratio, reserve requirement, liquidity regulations, and asset quality have a systemically significant impact in reducing systemic risk amongst deposit money banks in Nigeria. Additionally, these regulations help prevent excessive risktaking, reduce the likelihood of bank failures, and promote public confidence in the financial system. The study recommends that regulators should continue to align with global standards like Basel III by enforcing stricter capital adequacy and liquidity requirements, and banks should adopt robust internal risk management frameworks. The research contributes to the critical understanding and evidence on which regulations are most effective in curbing systemic risk in Nigeria, providing insights for policymakers and banking industry stakeholders.
deposit money banks in Nigeria, spanning 10 years from 2015 to 2024. The ex-post facto research design was adopted for this study. The population of this study consists of the 24 listed Deposit Money Banks licensed to operate in Nigeria. A simple random sampling technique was adopted to select 5 banks categorized as domestic systemically important banks (D-SIBs) from the 24 licensed banks, enhancing the generalizability of the findings. Using the panel regression model analysis, the findings reveal that financial regulations such as capital adequacy ratio, reserve requirement, liquidity regulations, and asset quality have a systemically significant impact in reducing systemic risk amongst deposit money banks in Nigeria. Additionally, these regulations help prevent excessive risktaking, reduce the likelihood of bank failures, and promote public confidence in the financial system. The study recommends that regulators should continue to align with global standards like Basel III by enforcing stricter capital adequacy and liquidity requirements, and banks should adopt robust internal risk management frameworks. The research contributes to the critical understanding and evidence on which regulations are most effective in curbing systemic risk in Nigeria, providing insights for policymakers and banking industry stakeholders.
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