International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

A Critique of the Legal Regime Protecting of Bank’s Investors: Lesson for Nigeria in Global Financial Crisis
Nuhu Musa Idris

Due to its delicate position in economy, banks are the most highly regulated institutions in every jurisdiction, with very strong regulators. However, like the other players in the economy, banks as companies have their own class of stakeholders, comprising; the management team, the Board of Directors, Share holders, Depositors and the general public (supposedly the depositors). The management and the board of directors are the key players in running the day to day affairs of the banks. Share holders, on the other hand, are those who invest their money to form the bank in the first place, as without whom, there would not be any bank at all. However, due to the nature of the banking system, these investors are subject to very stringent regulations and expose to more risk than all the investors in the other sector of the economy. As mentioned earlier, the current legal regimes regulating the banking industry, do not recognize the peculiar nature of this class of investors and level of risk they are exposed to, as a result of the emerging issue of corporate governance such as; remunerations of Bank Executive on the one hand and governmental policies such as; the bailout on the other. This paper critical examines the nature and scope of the legal regimes that protect Investors in the banking sectors, as well as the impact of the global financial crisis on the banking sector of the developing countries, like Nigeria. An analysis of the legal regimes will bring to fore an interface between the protection of the investors in bank on the one hand and the emerging issues of corporate governance and some governmental policies on the other. And it will advocate whether there is the need to have a comprehensive international legal regime protecting the bank investors particularly where cross border investment is concerned, through regulating the Bank Executive Remuneration and propriety trading, and other riskier businesses carried out by bank.

Full Text: PDF