ABSTRACT
Chapter 2 discusses the economic foundation for financial intermediation, as well as the role of the financial system in a frontier market. Financial system comprises of four elements: financial regulators, instruments, markets and institutions. The structure of the financial system, including the principal regulators, the types of financial markets and institutions in Nigeria, are discussed. The financial system in Nigeria includes financial markets (money and capital markets), financial instruments (treasury bills, treasury certificates, central bank certificates), financial regulatory and supervisory authorities and financial institutions. Over the last five decades, the structure of the Nigerian financial system has undergone several changes in terms of ownership structure from the public to private sector, the types and length of financial instruments and the number of financial institutions operating in the country. A brief financial assessment is undertaken with a focus on financial concentration, soundness, depth and inclusion. The Financial System Strategy 2020 is briefly outlined.
