European Journal of Business and Innovation Research (EJBIR)

EA Journals

The Failure of Lehman Brothers and Merril Lynch: A Lesson for the Nigerian Banking Industry

Abstract

In recent times, the global instability that experienced in the financial system and banking sub-sector in particular was as a result of institutional failures. Consequently, banking experts in Nigeria said that, the failure of the two banks was an enough signal to the Nigeria banking industry. Therefore, the study examined the collapse of Lehman Brothers and Merril Lynch  as a rethink lesson for the Nigerian Banks. However, the study reveals that the two banks were absolutely limiting to the size and age in determining the future of their banks instead of depending on the efficiency and effective management of risky assets. Also the conventional lending procedures were not instituted rather they depend on subprime mortgage arrangement that did not have collateral securities. The declining home prices had made refinancing more difficult as a result of inadequate innovations in securitization. We therefore, recommend that the regulatory bodies should not be over confident on the conventional tools of banking supervision rather they employ more non-conventional methods of obtaining insider information. The current crops of bankers should closely be monitored to avoid manipulation as could be seen from the consolidation exercise. CBN should have full autonomy to run the finance market efficiently. Finally, government should also allow CBN to have the air of confidence in discharging its responsibilities.

Keywords: Banking Industry, Failure, Lehman Brothers, Lesson, Merril Lynch, Nigerian

cc logo

This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 Unported License

 

Recent Publications

Email ID: editor.ejbir@ea-journals.org
Impact Factor: 7.79
Print ISSN: 2053-4019
Online ISSN: 2053-4027
DOI: https://doi.org/10.37745/ejbir.2013

Author Guidelines
Submit Papers
Review Status

 

Scroll to Top

Don't miss any Call For Paper update from EA Journals

Fill up the form below and get notified everytime we call for new submissions for our journals.