NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JANUARY 2021 EXAMINATION

COURSE CODE: BFN 740

CREDIT UNIT: 2

COURSE TITTLE: REGULATION OF FINANCIAL INSTITUTIONS

TIME ALLOWED: 2HOURS

Instruction: 1. Attempt question number one (1) and any other two (2)

2. Question number one (1) is compulsory and attracts 30 marks, while any other two questions attract 20 marks each

3. Present your answers any points in a clearly and orderly manner

1a.What is information asymmetry? Discuss briefly the effect of asymmetric information on the operations of financial markets. 7.5 marks

1b. Banks are often regarded as heavily regulated financial institutions. Advance reasons for such level of regulation in banking institutions. 2.5 marks

1c. Enumerate the implications of the 1986 Banking Sector Liberalization Policy in Nigeria which derives from the implementation of the Structural Adjustment Programme (SAP). 5 marks 1d. Outline the efforts of the regulatory authorities towards banking system stability in Nigeria. 5 marks

1e. Briefly explain the measures introduced by the Securities and Exchange Commission to protect investors. 2 marks

1f. List at least six vital disclosures in a prospectus 3 marks 1g. Identify at least five regulators in the Nigeria financial system 2.5 marks

1h. Briefly discuss the direct control instrument of economic stabilization 2.5 marks

2a. Outline the major highlights of the 1952 Banking Ordinance 2.5 marks

2b. State at least eight contributions of regulation to the development and proper functioning of financial institutions. 8 marks

2c. Mention any five strategies adopted by the NDIC in the management of banking distress. 5 marks

2d. Globalization has made possible the integration of financial markets across the globe, and organizations strive to compete at the global level.

Discuss the common difficulties associated with international financial markets. 4.5 marks

3a. State any five (5) functions rendered by the Securities and Exchange Commission. 5 marks

3b. Discuss the technique of OMO as an instrument of monetary control. 10 marks

3c. Briefly explain five(5) criticisms of direct control instrument of economic stabilization. 5 marks

4a. Distinguish fiscal and monetary policy 5 marks

4b. List any ten objectives of regulation 5 marks

4c. State the functions of NDIC as provided by its enabling Act. 5 marks

4d. State any five sources of instability in the Nigerian banking industry 5 marks