Abstract:

This paper reviews the Nigeria’s experience as a typical frontier market against the recent global financial crises which led to serious consequences in the financial system. The paper adopts the discussion and explanation methods with graphical analysis to analyse the events in the financial system, the banking and capital markets respectively. The paper discusses the highly speculative tendencies in the stock market and emphasises on the financial markets rather than the economy. Though the banking system benefited from financial globalisation, these benefits have been lost to the crises. It surveys the financial system to discover the areas of protection needed for the market and the need to take precautions via the use of policy instruments right away before another burst in the market. It also recommends that the banks be incentivised to lend more to the real sector since banks have suddenly become risk averse. This can be done to improve the financial landscape and encourage the MSME to improve income.