NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JULY 2018 EXAMINATION

COURSE CODE: BFN 740                                                              CREDIT UNIT: 2

COURSE TITLE: REGULATIONS OF FINANCIAL INSTITUTIONS

TIME ALLOWED: 2 HOURS

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

    2. Question number 1 carries 30 marks, while the other questions carry 20 marks each.

                         3. Present your points in coherent and orderly manner.

QUESTION ONE (COMPULSORY)

a) The banking system is not insulated from instability. Discuss both exogenous and endogenous issues involved.  (15 marks) 

b) The Nigeria Deposit Insurance Corporation is a major player in the regulatory framework of the financial institutions in the country. Discuss the rationale for its establishment. (15 marks)

QUESTION TWO

Discuss any ten (10) underlying reasons that justify regulation of financial institutions. (20 marks)

QUESTION THREE

a) IMF conditionality requires appropriate policy reform by a member country towards accessing its loan. Discuss this statement.     (10 marks)     

b) Then explore any benefits of the Fund to the member nations.  (10 marks)

QUESTION FOUR

Discuss the implications of asymmetric information in the operations of the banking system.    (20 marks)

QUESTION FIVE

a) Explain the different types of monetary policy regimes in terms of the applicable monetary regimes, target market variables, and long term objectives  (15marks)

b) Explain any two factors that influence the choice of monetary policy framework by a central bank.   (5marks)