摘要：Market discipline, particularly from depositor’s perspective, is believed to have the incentive for curbing excessive appetite for risk by banks, particularly if the information on discipline devices is to the knowledge of bank managers. Adopting a generalised method of moments closely related to that of Blundell and Bond (1998), the study investigates the concept of market discipline in Nigeria using quarterly micro-data from 2007Q1 to 2016Q4 across twenty four (24) banks. Typifying banks and deposits, the study finds evidence in support of market discipline for smaller and domestically-controlled banks, in terms of deposit reallocation, with foreign currency account holders as most active. The big and foreign-owned banks however pay higher deposit rate as compensation. In other words, there is the presence of the concept of too-big-to-fail and too-good-to-fail. The study advocates for increase in the dissemination of banks information to the Nigerian public, so as to enable depositors take proactive deposit decisions. It further recognises the need for Central Bank of Nigeria (CBN) to toughen her supervisory role by adequately and openly sanctioning banks that violate regulatory provisions. This will not only serve as deterrent to others that might intend similar violations, but provide information about erring banks to depositors who will process and use them as discipline device.
