THE ROLE OF CENTRAL BANK IN REGULATING AND REGULATION AND STABILIZATION AN ECONOMY (A CASE STUDY OF THE CENTRAL BANK OF NIGERIA

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ABSTRACT

This research study titled “This role of the Central bank in regulating and stabilization an economy ; a case study of the Central Bank of Nigeria)” was undertaken with a view to evaluating the extent of the Central Bank carry out her stabilization and regulating role on the Nigeria economy. The regulation and stabilization of any economy is an obvious case that cannot be overemphasized. Pursuant to this study therefore, the researcher, employed basically secondary data sourced from texts, billion magazines and journals. The researchers findings indicated that over time the Central Bank which his at the apex of the financial system has effectively used the instruments of Monetary and fiscal policies to not only regulate, but also to stabilize the economy and ensure economic growth and development or the Nation. The research is thus recommending that for macro-economic stability, full employment and equitable distribution of resources amongst other to be sustained, the monetary authorities and the CBN in particular should be reinforce its regulatory functions.

INTRODUCTION

1.1BACKGROUND OF THE STUDY

The establishment of the banking system in Nigeria came as a result of persistent effort of Nigerian nationalist. Apart from the struggle for political independence, the nationalist equally wanted a solid economic basic for the new nation/ Prior to the establishment of the central Bank of Nigeria, the West African Currency Board (WACB) which as established by the colonial government in 1912, had the responsibility of issuing legal tender currency in West Africa. It was also charged with the existing currencies and the investment of its reservoirs. There was a fixed party or local currency with the British Pond, while the currency had 100% starling coverage. However, because of the automatic linkage of the West Africa currencies Board with the British sustain. It could not engage in monetary management.

But the colonial government felt that Nigerian Nationalists for a Central Bank was triggered off by the unpresented, banking failures of early 1950 as a result of the rate of Banking failure in Nigerian. The colonial government vested the control of banking systems on the financial secretary because of their view tat Nigeria was ill-equipped for a Central Bank.

The first commission was that of L. Fisher, the expert of the bank of England he was appointed by the colonial admission in 1953, to inquire into the desirability and practicability of establishing a Central Bank in Nigeria as an instrument for promoting economic development for the country. Fisher, who based his stuffy on Orthodox banking principles, reported that it was not feasible to establish a Central Bank on the grounds that thy financial environment

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THE ROLE OF CENTRAL BANK IN REGULATING AND REGULATION AND STABILIZATION AN ECONOMY (A CASE STUDY OF THE CENTRAL BANK OF NIGERIA

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