MONETARY JEOPARDY (MJ) AND NIGERIA’S DEPOSIT MONEY BANK PERFORMANCE (DMBP) RELATIONSHIP: ARDL APPROACH
DOI:
https://doi.org/10.51594/ijae.v4i8.409Abstract
This study examined monetary jeopardy (MJ) and Nigeria’s deposit money bank performance (DMBP) relationship, for the periods of 1996-2021 (26years). Specifically, the study examined measures of MJ; Credit Risks (CR), Liquidity Risks (LR), Operational Risks (OR), Market Risks (MR) on DMBsP [Return on Equity (ROE)]. The study made used of aggregate secondary data and was analyzed with Autoregressive distributed lag model having established that the model exhibited mixed integration. Meanwhile, the Multicollinearity test and Heteroskedasticity test clearly revealed no multicollinearity problem and that it is Homoskedastic signaling fitness for prediction. The results showed that CR has a significant effect on ROE in the short run but an insignificant effect on ROE in the long run; LR also has an insignificant effect on ROE in both the short and long runs; and MR has a significant negative impact on the ROE of DMBs in Nigeria in both the short and long runs. Hence, the study concluded that financial risk does not have significant effect on performance of DMBs in Nigeria. The recommended that the DMBs in Nigeria should ensure that all the conditions required before granting loans to their customers should be met to avoid default in order to enhance their profitability.
Keywords: Monetary Jeopardy, Performance, Operational, Liquidity and Market Risks.
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Copyright (c) 2022 EHIEDU, Victor C. Ph.D.
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