The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria

Olofinlade Samuel Oluwapelumi; Aremu Olusegun Samuel; Ogunwole Cecilia Oluwakemi Aina

doi:doi:10.11648/j.jfa.20210903.11

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The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria

Olofinlade Samuel Oluwapelumi, Aremu Olusegun Samuel, Ogunwole Cecilia Oluwakemi Aina

Published in Journal of Finance and Accounting (Volume 9, Issue 3)

Received: 15 February 2021 Accepted: 2 March 2021 Published: 14 May 2021

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Abstract

The study investigated the impact of monetary policy on assets management of banks in Nigeria which has been an issue that has gained momentum among scholars of repute. Different relevant empirical reviews were carried out. The study specifically addressed the effect of monetary policy rate, liquidity rate and cash reserve requirement on banks asset management for the period of 37 years which spanned from 1981 through 2017. While secondary data were sourced from the Central bank of Nigeria Statistical bulletin and National Bureau of Statistics. However, Vector Error correction (VECM) econometric techniques approach was applied on the secondary data. It employed this econometric technique on unit root test to establish the stationarity of the variables and the macroeconomic variables used were not stationary at level hence the study proceded to first difference where the macroeconomic variables used became stationary at the first order. The result from Johansen Co-integration reveals that monetary policy rate and cash reserve requirement have significant and positive effect on bank asset management while liquidity rate had an insignificant negative effect on bank asset management. The study concluded that monetary policy has a significant effect on bank asset management in Nigeria. It was recommended that Central Bank of Nigeria (CBN) should adjust the monetary policy rate by reducing the cash reserve ratio which will increase liquidity to enable the commercial banks to discharge their lending and investment duties effectively to the public.

Published in	Journal of Finance and Accounting (Volume 9, Issue 3)
DOI	10.11648/j.jfa.20210903.11
Page(s)	60-66
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Monetary Policy, Asset Management, Deposit Money Banks

References

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[2]	Adegbite, F. F., & Dada, O. T. (2018). Risk assets management, liquidity management and sustainable performance in Nigeria Deposit money banks. International Journal of Accounting Research, 6 (2), 1-10.
[3]	Adegbite, F. F., Asaolu, T. O., & Enyi, E. P. (2013). Distress resolution in Nigerian banking sector: The role of assets and liabilities management. International Journal of Financial Research, 4 (3), 70-82.
[4]	Ajayi, F. O., and Atanda, A. A. (2012). Monetary policy and bank performance in Nigeria: A two-step cointegration approach. African Journal of Scientific Research, 9 (1), 463-476.
[5]	Ajibola, J. O. (2016). The effects of assets and liability management on financial performance of some selected Nigerian banks. Journal of Accounting and Financial Management, 2 (2), 44-63.
[6]	Ayogu, M. D., and Emenuga, C. (2009). Central banking experience and the conduct of monetary policy in Nigeria. African Economic Research Consortium, Financial Market Working Papers 1-17.
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[8]	Central Bank of Nigeria (2014). Instruments of monetary policy. CBN Educational Series.
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[10]	Ibeabuchi, S. N. (2007). Overview of monetary policy in Nigeria. Central Bank of Nigeria Economic and Financial Review, 45 (44), 15-37.
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[18]	Okpara, G. C. (2010). Monetary policy and stock market returns: Evidence from Nigeria. Journal of Economics, 1 (1), 13-21.
[19]	Okpara, G. C. (2009). A synthesis of the critical factors affecting performance of the Nigerian banking system. European Journal of Economics, Finance and Administrative Sciences, 17, 34-44.
[20]	Omankhanlen, A. E., Okorie, U. E., & Niyan, T. J. (2015). A dynamic analysis of the relationship between monetary policies and loan risk exposures in Nigerian deposit money Banks. Mediterranean Journal of Social Sciences, 6 (6), 247-255.
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APA Style

Olofinlade Samuel Oluwapelumi, Aremu Olusegun Samuel, Ogunwole Cecilia Oluwakemi Aina. (2021). The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria. Journal of Finance and Accounting, 9(3), 60-66. https://doi.org/10.11648/j.jfa.20210903.11

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ACS Style

Olofinlade Samuel Oluwapelumi; Aremu Olusegun Samuel; Ogunwole Cecilia Oluwakemi Aina. The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria. J. Finance Account. 2021, 9(3), 60-66. doi: 10.11648/j.jfa.20210903.11

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AMA Style

Olofinlade Samuel Oluwapelumi, Aremu Olusegun Samuel, Ogunwole Cecilia Oluwakemi Aina. The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria. J Finance Account. 2021;9(3):60-66. doi: 10.11648/j.jfa.20210903.11

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@article{10.11648/j.jfa.20210903.11,
  author = {Olofinlade Samuel Oluwapelumi and Aremu Olusegun Samuel and Ogunwole Cecilia Oluwakemi Aina},
  title = {The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria},
  journal = {Journal of Finance and Accounting},
  volume = {9},
  number = {3},
  pages = {60-66},
  doi = {10.11648/j.jfa.20210903.11},
  url = {https://doi.org/10.11648/j.jfa.20210903.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20210903.11},
  abstract = {The study investigated the impact of monetary policy on assets management of banks in Nigeria which has been an issue that has gained momentum among scholars of repute. Different relevant empirical reviews were carried out. The study specifically addressed the effect of monetary policy rate, liquidity rate and cash reserve requirement on banks asset management for the period of 37 years which spanned from 1981 through 2017. While secondary data were sourced from the Central bank of Nigeria Statistical bulletin and National Bureau of Statistics. However, Vector Error correction (VECM) econometric techniques approach was applied on the secondary data. It employed this econometric technique on unit root test to establish the stationarity of the variables and the macroeconomic variables used were not stationary at level hence the study proceded to first difference where the macroeconomic variables used became stationary at the first order. The result from Johansen Co-integration reveals that monetary policy rate and cash reserve requirement have significant and positive effect on bank asset management while liquidity rate had an insignificant negative effect on bank asset management. The study concluded that monetary policy has a significant effect on bank asset management in Nigeria. It was recommended that Central Bank of Nigeria (CBN) should adjust the monetary policy rate by reducing the cash reserve ratio which will increase liquidity to enable the commercial banks to discharge their lending and investment duties effectively to the public.},
 year = {2021}
}

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TY  - JOUR
T1  - The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria
AU  - Olofinlade Samuel Oluwapelumi
AU  - Aremu Olusegun Samuel
AU  - Ogunwole Cecilia Oluwakemi Aina
Y1  - 2021/05/14
PY  - 2021
N1  - https://doi.org/10.11648/j.jfa.20210903.11
DO  - 10.11648/j.jfa.20210903.11
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 60
EP  - 66
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20210903.11
AB  - The study investigated the impact of monetary policy on assets management of banks in Nigeria which has been an issue that has gained momentum among scholars of repute. Different relevant empirical reviews were carried out. The study specifically addressed the effect of monetary policy rate, liquidity rate and cash reserve requirement on banks asset management for the period of 37 years which spanned from 1981 through 2017. While secondary data were sourced from the Central bank of Nigeria Statistical bulletin and National Bureau of Statistics. However, Vector Error correction (VECM) econometric techniques approach was applied on the secondary data. It employed this econometric technique on unit root test to establish the stationarity of the variables and the macroeconomic variables used were not stationary at level hence the study proceded to first difference where the macroeconomic variables used became stationary at the first order. The result from Johansen Co-integration reveals that monetary policy rate and cash reserve requirement have significant and positive effect on bank asset management while liquidity rate had an insignificant negative effect on bank asset management. The study concluded that monetary policy has a significant effect on bank asset management in Nigeria. It was recommended that Central Bank of Nigeria (CBN) should adjust the monetary policy rate by reducing the cash reserve ratio which will increase liquidity to enable the commercial banks to discharge their lending and investment duties effectively to the public.
VL  - 9
IS  - 3
ER  -

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Author Information

Olofinlade Samuel Oluwapelumi

Department of Finance, Faculty of Management Sciences, Ekiti State University, Ado-Ekiti, Nigeria
Aremu Olusegun Samuel

Department of Banking and Finance, Faculty of Financial Management Studies, The Polytechnic, Ibadan, Nigeria
Ogunwole Cecilia Oluwakemi Aina

School of Business, University of Ibadan, Ibadan, Nigeria

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APA Style

Olofinlade Samuel Oluwapelumi, Aremu Olusegun Samuel, Ogunwole Cecilia Oluwakemi Aina. (2021). The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria. Journal of Finance and Accounting, 9(3), 60-66. https://doi.org/10.11648/j.jfa.20210903.11

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ACS Style

Olofinlade Samuel Oluwapelumi; Aremu Olusegun Samuel; Ogunwole Cecilia Oluwakemi Aina. The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria. J. Finance Account. 2021, 9(3), 60-66. doi: 10.11648/j.jfa.20210903.11

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AMA Style

Olofinlade Samuel Oluwapelumi, Aremu Olusegun Samuel, Ogunwole Cecilia Oluwakemi Aina. The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria. J Finance Account. 2021;9(3):60-66. doi: 10.11648/j.jfa.20210903.11

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@article{10.11648/j.jfa.20210903.11,
  author = {Olofinlade Samuel Oluwapelumi and Aremu Olusegun Samuel and Ogunwole Cecilia Oluwakemi Aina},
  title = {The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria},
  journal = {Journal of Finance and Accounting},
  volume = {9},
  number = {3},
  pages = {60-66},
  doi = {10.11648/j.jfa.20210903.11},
  url = {https://doi.org/10.11648/j.jfa.20210903.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20210903.11},
  abstract = {The study investigated the impact of monetary policy on assets management of banks in Nigeria which has been an issue that has gained momentum among scholars of repute. Different relevant empirical reviews were carried out. The study specifically addressed the effect of monetary policy rate, liquidity rate and cash reserve requirement on banks asset management for the period of 37 years which spanned from 1981 through 2017. While secondary data were sourced from the Central bank of Nigeria Statistical bulletin and National Bureau of Statistics. However, Vector Error correction (VECM) econometric techniques approach was applied on the secondary data. It employed this econometric technique on unit root test to establish the stationarity of the variables and the macroeconomic variables used were not stationary at level hence the study proceded to first difference where the macroeconomic variables used became stationary at the first order. The result from Johansen Co-integration reveals that monetary policy rate and cash reserve requirement have significant and positive effect on bank asset management while liquidity rate had an insignificant negative effect on bank asset management. The study concluded that monetary policy has a significant effect on bank asset management in Nigeria. It was recommended that Central Bank of Nigeria (CBN) should adjust the monetary policy rate by reducing the cash reserve ratio which will increase liquidity to enable the commercial banks to discharge their lending and investment duties effectively to the public.},
 year = {2021}
}

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TY  - JOUR
T1  - The Impact of Monetary Policy on Assets Management of Deposit Money Banks in Nigeria
AU  - Olofinlade Samuel Oluwapelumi
AU  - Aremu Olusegun Samuel
AU  - Ogunwole Cecilia Oluwakemi Aina
Y1  - 2021/05/14
PY  - 2021
N1  - https://doi.org/10.11648/j.jfa.20210903.11
DO  - 10.11648/j.jfa.20210903.11
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 60
EP  - 66
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20210903.11
AB  - The study investigated the impact of monetary policy on assets management of banks in Nigeria which has been an issue that has gained momentum among scholars of repute. Different relevant empirical reviews were carried out. The study specifically addressed the effect of monetary policy rate, liquidity rate and cash reserve requirement on banks asset management for the period of 37 years which spanned from 1981 through 2017. While secondary data were sourced from the Central bank of Nigeria Statistical bulletin and National Bureau of Statistics. However, Vector Error correction (VECM) econometric techniques approach was applied on the secondary data. It employed this econometric technique on unit root test to establish the stationarity of the variables and the macroeconomic variables used were not stationary at level hence the study proceded to first difference where the macroeconomic variables used became stationary at the first order. The result from Johansen Co-integration reveals that monetary policy rate and cash reserve requirement have significant and positive effect on bank asset management while liquidity rate had an insignificant negative effect on bank asset management. The study concluded that monetary policy has a significant effect on bank asset management in Nigeria. It was recommended that Central Bank of Nigeria (CBN) should adjust the monetary policy rate by reducing the cash reserve ratio which will increase liquidity to enable the commercial banks to discharge their lending and investment duties effectively to the public.
VL  - 9
IS  - 3
ER  -

Copy | Download