Food Price Trigger

The Post Office Savings Bank established in 1889 was later rebaptised in 1974 to be known as the Federal Savings Bank (FSB). The FSB even though carries out certain commercial banking functions still has as its objectives, as was stipulated in its parent bank act – the Post-Office Savings Act, 1958, has the following:

(i) to provide a ready means for the deposit of savings, especially in the rural areas, and

(ii) to encourage thrift and the mobilisation of savings, also, especially in the rural areas.

These special savings scheme were at that time designed to mobilise funds for national development, especially at rural levels.

4.0 CONCLUSION

We have in this unit examined the role of SEC and NSE in the capital market especially as the CSCS has custodial arrangement under the Global Depository System. We rationalised the attractions the Nigerian Capital Market holds for foreign investors and recognized that the capital market was undergoing a difficult time and advanced the reasons for the downturn. We have also discussed extensively the money market, its roles and the instruments used for business transactions therein.

We extensively considered the financial and non-financial institutions, their types and the functions they carry out. We examined the intermediation roles played by these institutions for the growth and development of the Nigerian economy.

As noted in the preamble on 3.0, we have decided to discuss the roles of money and capital markets comprehensively in relation to the development of entrepreneurship so that learners may be able to comprehend the workings in these markets and explore the possibility of raising necessary capital for the formation of their businesses after completion of their programme in the National Open University of Nigeria (NOUN).

5.0 SUMMARY In this unit, we,

defined the concepts ‘capital market’ and ‘money market’;

traced the history of both money and capital markets;

enumerated and explained the functions of Nigerian Capital and Money Markets;

defined the terms ‘financial’ and ‘non-financial’ institutions;

listed and discussed the various types of financial and non-financial Institutions;

stated the functions of financial and non-financial Institutions.

In the next unit, we shall look at Nigeria’s foreign exchange system, its history, importance of exchange control, the forms used, participants in the foreign exchange market, documentation for foreign exchange applications, domiciliary accounts, methods of determining foreign exchange rates, types of floating exchange rates and details of foreign exchange bidding auctions

6.0 TUTOR-MARKED ASSIGNMENT

1. Why is a Money Market necessary in Nigeria? What are the basis features of money market? List and discuss five the instruments used in trading in the market.

2. What is a financial system? Discuss the various categories of institutions that make up the structure of The Nigerian Financial System.

3. Central Bank of Nigeria is regarded as the apex bank in Nigeria. List and explain some of the functions of this regulatory authority.

4. Compare functions of Merchant Banks with that of Commercial Banks.

5. Examine the main functions of the various types of Development Banks.

6. In what ways do the non-bank financial institutions contribute to the growth of the Nigerian economy?

7. Discuss the difference between the People’s Bank of Nigeria and Community Banks in terms of ownership, geographical spread and customers served.

8. Write short notes on the following:

(a) Insurance Companies (b) Finance Companies (c) Discount Houses (d) NERFUND

9. Define or explain the term Capital Market. Why is capital market established in Nigeria?

10. Discuss fully the main functions of the Nigerian Securities and Exchange Commission (NSEC) and The Nigerian Stock Exchange (NSE).

11. Distinguish between the Money Market and the Capital Market. Examine the various instruments traded in each market.

13. What are the objectives of the Nigerian Stock Exchange? What are the contributions of this body to the economic development of Nigeria?

14. Enumerate the positive attributes of the Nigerian Capital Market which offers attractions to foreign investors.

7.0 REFERENCES/FURTHER READINGS

Alile, H. J. et al, “The Nigerian Stock Market in Operation “, The Nigerian Stock Exchange, Lagos.

Anyanwu, J.C. Monetary Economies: Theory, Policy and Institutions. Onitsha: Hybrid Publishers Limited, 1993.

Esezobor, E.A. (2009). International Finance (2^nd edition). Lagos: The CIBN Press Limited, 7 Turton Street, Sabo-Yaba. ISBN: 978-37278-4-2.

Gupta, S. B. Monetary Economics, Institutions Theory and Policy. New Delhi, India: S Chand and Company Limited, 1982.

Hache, J. The Economic of Money and Income. London: Heinemann, 1970.

Jihingam, M. L. Money, Banking, and International Trad.e New Delhi: Vani Educational Books, 1984.

Nwankwo, G. O. The Nigerian Financial System. London: Macmillan Publishers Limited, 1980.

Nwankwo, G. O. The Nigerian Financial System. London: Macmillan Publishers Limited, London, 1985.

Ojo, A.T. et al. Banking and Finance in Nigeria. Bedfordshire: Graham Bum, 1982, p. 277.

Okigbo, P.N.C. The Nigerian Financial System, Structure and Growth. Essex: Longman Publishing Company Limited, 1981.

Onuigbo, O. Elements of Banking and Economics. Aba: Esquire Press and Books Enterprises 1992.

Orji, J. Elements of Banking, Rock Communications. Enugu: 1960.

Osubor, J. U. Business Finance and Banking in Nigeria. Owerri: New African Publishing Co., 1981.

Oyido, B. C. “Promoting Money Market Development in Nigeria (1960 - 1985)” CBN Economic And Financial Review, Vol. 24 No.1 March 1986.

Phillips, T. “The role of the Capital Market in a Recessed Economy”, Bullion, Vol. 9. No 1, January/ March, 1985 pp.219.

Uzoaga, W. O. Money and Banking in Nigeria. Enugu: Fourth Dimension Publishing Co, 1981.

UNIT 3 FOREIGN EXCHANGE MARKET