The role of central bank in the development of capital market
Oyetade P Oluwatoyese
CHAPTER ONE
1.0 INTRODUCTION
The role of the Nigerian Capital Market in raising or mobilising medium to long term funds for both micro and macro development sub-sectors have been commendable in recent times. The main institutions in the capital market include – the Securities and Exchange Commission (SEC), which is the apex body and serves as the regulatory authority of the market; the Nigerian Stock Exchange (NSE); the Issuing Houses; and the Stock Firms.
Stressful development demand in modern times, as well as the need to respond to multi-variant global investment challenges, have widened and sharpened the role of the Central Bank in the Capital Market operations (Onosode, 1998).
Definitely, a Capital Market is the market for resource intermediation for capital input, i.e., the financial market in which medium and long-term credit is available for whole and sub-sector economic development. Capital Market is a market for long-term company loan capital and share capital and government bonds.
The capital market is concerned with those who are short of fund and need to borrow for long-term purposes. Also, those who have fund surplus to the immediate requirements and wish to lend or invest these funds over long periods or lend funds to the Capital Market. This is known as financial intermediary. The Capital Market together with the Money Market, which provides short-term funds, is the main source of external finance to industry and government. The financial institutions involved in the Capital Market include – the Central Bank, Commercial Banks, the Saving Investing Institutions (Insurance companies, Pension funds, etc.), Issuing Houses, and Merchant Banks.
The Capital Market is categorised into two and they are: the primary market, which is responsible for new insurance securities; and the secondary market, which is involved in trading of existing securities. The Capital Market comprises of the following: the Nigerian Stock Exchange
CHAPTER ONE
1.0 INTRODUCTION
The role of the Nigerian Capital Market in raising or mobilising medium to long term funds for both micro and macro development sub-sectors have been commendable in recent times. The main institutions in the capital market include – the Securities and Exchange Commission (SEC), which is the apex body and serves as the regulatory authority of the market; the Nigerian Stock Exchange (NSE); the Issuing Houses; and the Stock Firms.
Stressful development demand in modern times, as well as the need to respond to multi-variant global investment challenges, have widened and sharpened the role of the Central Bank in the Capital Market operations (Onosode, 1998).
Definitely, a Capital Market is the market for resource intermediation for capital input, i.e., the financial market in which medium and long-term credit is available for whole and sub-sector economic development. Capital Market is a market for long-term company loan capital and share capital and government bonds.
The capital market is concerned with those who are short of fund and need to borrow for long-term purposes. Also, those who have fund surplus to the immediate requirements and wish to lend or invest these funds over long periods or lend funds to the Capital Market. This is known as financial intermediary. The Capital Market together with the Money Market, which provides short-term funds, is the main source of external finance to industry and government. The financial institutions involved in the Capital Market include – the Central Bank, Commercial Banks, the Saving Investing Institutions (Insurance companies, Pension funds, etc.), Issuing Houses, and Merchant Banks.
The Capital Market is categorised into two and they are: the primary market, which is responsible for new insurance securities; and the secondary market, which is involved in trading of existing securities. The Capital Market comprises of the following: the Nigerian Stock Exchange
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