Bank Failure in Nigeria – Role, Prevention of Failure by Central Bank


This study, which is, captioned the Role and Importance of the Central Bank in the Prevention of Bank Failure in Nigeria has revealed the types, causes effects recognition and prevention of Bank Failure in Nigeria.

Some of the findings indicated that banking failure was mainly as a result of poor portfolio management and inadequate capital basis, a majority of the population interviewed acknowledge the fact that Bank Failure in Nigeria an be prevented.

The study also pointed that the Central Bank of Nigeria has not relented in it effort in this light against distress within the Nigeria financial system, illustrating the role banks have to play in the growth of the economy for the well being of the country.

Some other causes were identified which were discussed in details encompassing all other causes not mentioned as separate causes of Bank Failure in Nigeria.

These major causes include, macro-economic instability, poor portfolio management, fraudulent activities by directors, the competent and unqualified staff, last but not the least, inadequate capital base.

The study concludes its findings by commending the that the Central bank of Nigeria should ensure that banks adhere strictly to the prudential guidelines.

The tribunals that have been set-up for the purpose of debt recovery should not relevant in their effort. Workshop should be conducted from time to time to discuss changing economic issues that affect the banking industry either positively or negatively so the Bank Failure in Nigeria will be cu-tailed to a large extent without causing havoc to the nations economy.




The history of Bank Failure in Nigeria can be traced back to the early thirty’s when the industrial and Commercial Bank Limited which was established in 1929 and went into liquidation within a year it stored operation as a result of its generosity and liberty I extension of credit facilities especially to “managing directors” Ugwuanyi Willy (1977) pg. 33.




An attempt would be made to look at the word “Failure” secure relating it to what “Bank Failure in Nigeria” is all about, according to some authorities.

The general conception of failure means un-successful.

Unsuccessful in the sense that set goals are not attained as result of the presence of failure in the abilities of the individual or persons inn carrying out a particular assignment, which portrays weakness in such abilities.

The Oxford Advance Learner’s Dictionary of current English, by A. S. Hornby in his third edition of 1974, defines Bank Failure in Nigeria as “a state of being involvence”. He went further to say that “it could be as a result of neglect omission.

Mumn, in the Racyclopedia or Banking and Finance defines Bank Failure in Nigeria “as a situation when a bank is closed temporality or permanently or account of financial difficulties and including banks whose deposit liabilities went assumed by other banks at the time of closing, with the aid of loans or purchases of assets by Federal Deposit Insurance Company (thus in effect constituting “hidden failure”).

He finally summarized Bank Failure in Nigeria or insolvency as “the inability to pay deposit liabilities, Anyanweokoro.

Hassan Adamy in the news of 24th March, 1974, page 13 has the following to say on how to know a failure bank. “when the these portfolio a particular bank is carrying, is far out of proportion to its capital and deposit base. Mostly when the loan granted are of unsecured nature. He also said that “when the liquidity of a bank is very bank’s total asses”.

Hassan still went further to say, “when a bank is repeatedly suspended from the clearing house it is a sign of ill – health, the bank is insolvency.

Bank Failure in Nigeria according to F. U. Ezeuduju means different things to different people.

To some people, a bank fails only when it leases operation even if it has not been declared liquidated officially. A bank is said to have failed if it has not succeed in achieving any of the objectives for which it was established. Thus, a bank is considered a failure not only when it ceases operation but also when it cannot meet any of it’s customers as well as to its shareholders and even the community where it is established. Failure to meet obligations could be serious, mild or negligible.

The last, but not the least definition that we shall look at is that of the failed banks (Recovery of Deses) and financial malpractice’s in banks decree 1994, which says “that a failure bank is a bank or financial institution whose license has been revoked or which has been declared closed, placed under receivership or otherwise taken over by the Central Bank of Nigeria or Nigeria Deposit Insurance Corporation.

This study will concentrate in series branches of bank’s obligations, which includes inability’s to meet depositor’s demand for withdrawals persistent losses and outright liquidation. These firms of serious Bank Failure in Nigeria become worry – some in Nigeria during the following periods 1930’s to 1950’s and since lots 1980’s and even into the 90’s.



From the various definitions given by different authorities, we can deduct the following types of Bank Failure in Nigeria by Anyanwaokoro.

a. Temporary Bank Failure in Nigeria

b. Permanent Bank Failure in Nigeria

c. Hidden Bank Failure in Nigeria

d. Open Bank Failure in Nigeria



This is a situation where the bank retreats for a while due to financial difficulties and tries to find avenues for correcting it financial stress through or from the Nigeria Deposit Insurance Corporation of from other sources, after which it will open its doors again for business.



This is when a bank as its license revoked and goes out of business for good. It is bought over by the Central Bank of Nigeria or the Nigeria Deposit Insurance Corporation.



The bank in this case is able to obtain loans or make other necessary arrangement to get the situation of financial difficulty under control without the public having knowledge of the problem that the bank is going through. The situation is not made glaring to the eyes of the public.



Under this situation, the bank can no longer hide its financial difficulties from the public. All corrective measures to hide the bank’s ailment at this stage have proved abortive.



1. Macro – economic instability

2. Environmental constriction.

3. Poor portfolio management

4. The crippling holds on the CBN economy

5. Incompetent and unqualified stage

6. In – adequate capital base



This is the cause of the even changing policies of the government as it affects the entire economy of the nation. This is as a result of the constant and unplanned change in regimes of President and Heads of States.

Each government that comes into power does not follow strictly to the policies ready in existence before their regimes they embank on new plans or policies, which affects the entire economy and does not creates room for implication of some bank policies, which is expected to guide the bank for a period of time into the future. With these inconsistency the banks are left at the mercy of competent mangers with a stroke of good – luck, to see them through with adverse effect or individual banks.

The fault was indisciplaint which was encouraged by weak banking laws which failed to provide adequate penalty for operators’ effective way of making banks and there customers, shareholders and regulators account for their role in providing, promoting and utilizing banking services.


Since the mid – 1980’s, the economy was beset with sluggish growth in output and rapidly rising inflation for most of the period, and fast depreciating exchange rate until 1995. Economic downturn deprived the banking sector of the vibrancy as economic activities, which were expected to stimulate banking sector, declined. High inflation ad depreciating exchange rate eroded the purchasing power of bank customers. This encouraged the withdrawal from banks in order to meet essential needs, thereby reducing deposit liabilities with constitute the main source of banks’ loan able fund.



Tony Ndiulo, a senior finance correspondence attributed Bank Failure in Nigeria to fraudulent activities of directors of various banks. In a publication under money watch, tilted, “why the banks went under” on page 23 and 24 of Guardian of August 18, 1999 says the “apart from the three that owned banks – corporative and commerce bank, pan African bank and mercantile bank which were thrown into immediate problems by government directives in 1989 requiring all government parastatals to transfer their accounts to the Central Bank of Nigeria (CBN), the problem of the remaining 28 liquidated banks were caused by fraudulent activities by directors while many more are liked to financial mismanagement.

“For instance, the 1994 annual report of the Nigeria Deposit Insurance Corporation (NDIC) clearly showed how mindless borrowings from directors who had no intention to repay led to the liquidation of Alpha Merchant Bank and United Commercial Bank. In these banks a total sum of N2.43 billion was borrowed by directors and other top executives out of a debt stock of N2.74 billion. This follows that the loans borrowed by the bank chiefs represented 64.8% of the total loan portfolio of the banks.

“This point to the fact that the loans were not invested profit the bank, but was utilized to the benefits of greedy directors.

A financial expect observed that some bankers are moved into committing fraud as a result of the way directors and top management official move funds or degrade the bank. According to NDIC, frauds totaling of N1.37 billion was recorded in the banking industry in 1993. In 1994, the figure went of to N2.65 billion.



The Abubakar’s regime, which finally granted or returned the CBN’s autonomy after ten(10) years under the presidency and ministry of finance, will never be forgotten by the banking industry.

The granting of this autonomy to the CBN is for the (CBN) to formulate and implement monetary, credit and other policies, which will help stabilize the banking industry as well as the entire Nigeria economy.

The forms CBN governor, Paul Ogwuma said that “the CBN acknowledges it supervisory capacity as being less than optimal in the previous years” but “blamed it on the non-traditional functions which the CBN was saddled with over the years by the government”. The single act was responsible for the diversion of funds from the banking industry to other countries without the approval of the monetary authorities, which affected the entire industry because of the money squeeze.

Emeka Anaeto “identified the Apex Bank inability to check the excess of banks, and to adequately monitor, identify and furnish banks with do not comply with its various regulations and guidelines”. All these according to Ogwuma, were as a result of the crippling hold on the CBN’s autonomy and not the entire fault of the regulatory authorities.



Mike Anyanwaokoro in his book banking methods and processes reveals that incompetent and unqualified staff is recruited per jobs in the banks for key offices. With such, management team, the bank will surely lack innovations and will not meet professional demands of the jobs, which results, to incompetence

Some banks in the pose that failed had qualified staff in other field not related to banking which made them loose a séance of direction since the few months straining they received was not adequate for the competition in modern day banking which is quit dynamic and needs a qualified personnel in the filed who still needs his wits about him to survive the competition.

According to Ugwuanyi (199 pg. 104) “and the major reasons for establishment of the Nigeria Deposit Insurance Corporation (NDIC) were economic reforms and change in government policies. The introduction of (SAP) structural adjustment programme in 1986 was aimed at deregulating the economy towards market orientation in price determination the government relate heavily on the financial system vis-à-vis the banking sector.

Because of the role of the banks, in then implementation of the SAP policy, government became very reluctant to allow any bank to fail, no matter the banks financial condition and or quality of management.

Another example of macro-economic instability is the decision that the CBN should be under the presidency or ministry of finance, under the finance Minster. This decision had a cripping hold on the CBN for nearly ten years (10 years) and this seriously affected the banking industry since the CBN lacked the authority to measure out effective policies that will be of economic benefits to Nigeria but, was controlled by few individuals who maximized the benefits of being in control of the CBN.

The former CBN governor , Paul Ugwuma stated that “the CBN new autonomy and consequent monetary policies and measure would, primarily be targeted at achieving the macro-economic objectives of 1999 fiscal policy” and probably, that of subsequent years.

Ugwuanyi, went further to explain, “economic reforms exposed the banking sub-sector of the economy to more risk”.

Firstly, banks became fully involved in the risky foreign exchange business with its attendant speculative operations.

Secondly, the privatization exercise initiated by the government depended heavily on the co-operation of banks had officially been allowed to venture into leasing market.

These responsibilities simply increased use of depositors fund in the pursuit of bank profitability at the time bank capital ratio had been failing with these and many more economic change to come, the government now deemed it fit “to establish an insurance scheme to protect the funds of bank depositors” and thus the stability of bank in the economy, this establishment of the NDIC in 1988.



It has been observed that performance of banks on aggregate, deteriorate over the years as shown below


i. Capital adequacy measured by the average ratio of classified assets to shareholders’ fund, deteriorated over the years though marginal improvement become noticeable since 1995. There were sharp short falls in the required capital between 1992 and 1993 before some improvement since 1994.

F. U. Ezeuduji in page 18 of the CBN bullion of 1997, April and June, went further to illustrate more on the portfolio management of banks.


ii. Asset quality, as reflected in the ratio of classified assets to total loans and advance deteriorated progressively for many banks 1989 to 1994.


iii. Liquidity of banks, measured by the liquidity ratio, which fluctuated around the policy minimum between 1986 and 1992 showed some improvement since 1993. Relying on the desirable level of loan/deposit ratio of about 70 percent many banks over lent their resources most of the time.


iv. The earning indicators of the banks showed mixed and varying performance among the bank.


v. Bank management, measured by their inability to check capital inadequacy, poor asset quality, poor earning capital and distress has been rated in effective.


While poor portfolio management was the fundamental cause of bank disliabilited the effectiveness of portfolio management constituted the second level of causes.

The factors that contributed to poor portfolio management include the following:

a. Internal problems

b. Regulatory constraints

c. Environmental constraints



A review of the operation of the banks in the past ten years shows that the root cause of poor portfolio management was the operations’ insiders) lack of integrity which compromised order and accountability and opened the way for bas and doubtful debts as reflected in the rising ratio of classified assets to total loans and advances which reached a climax in 1994, before some improvement in 1995 when accountability was taken seriously through law enforcement for example, reported frauds and forgeries in commercial banks increase from N98.2 million in 1989 to N,655.2 million in 1994 when accountability was neglected much, and dropped sharply to n1,006.3 million in 1995 when the tribunals under the failed bank (recovery of debts) and financial malpractice’s decree forced bankers and their customers to account for their use of banks resources.



Despite the statutory effects of regulatory changes between 1986 and 1995, which tended to strengthen the banking sector generally some of the measures proved burdensome and counter productive to the system.

First, the transfer of public sector deposits from banks tot he CBN in 1989 proved too sudden, especially for weak banks with prudential passes. The viability of such banks was seriously impaired because they were unable to get alternative deposits in the mean time.

Second, there was easy and excessive licensing of banks between 1986 and 1991 which injected much competition into the system while, at the same time, the victims of the insuring competition were not allowed to leave the system even when they were no longer going concerns. This constituted a services constraint in sanitizing the system.

The third regulatory problem for banks was the mandatory financing of fiscal deficits liquidity which had to be moped up through the banks in the forms of mandatory holding of stabilization securities form 1990.


A look at the nature of banking with all the features of banking, will show that capital adequate is more important for banks than it is for other non-bank business enterprises.

Not only do banks use more borrowed funds than other firms, bank assets and liabilities are more risky than those of other firm since they are interest sensitive and very volatile, that is can be demanded or drawn on the bank at any time (Anyanwaokoro 1996, pg. 138).

From the banks ought to have enough capital besides the once stated by the regulatory authorities, per easy take-off on the activities.

The adequacy of capital for banks should be decided by various banks since “banks vary in size” and the degree f activities indulge by them requires varying maturity period to meet with the demand of their customers.

As it concerns Bank Failure in Nigeria, some licensed banks rushed into the business. They relied heavily on their ability to attract deposits without considering that something could go wrong with the economy and affects some of the loans and advances made with the funds of depositors. When depositors now embark on mass withdrawal which can lead to a run on the banks, some banks that had not provided for situation like this, find themselves over drawing them account with the Central Bank of Nigeria until the CBN put a stop to it and revoke their license, which insinuated that the banks has failed to meet with primary obligations.

The researcher have identified these to be major causes of Bank Failure in Nigeria. All the causes are incorporated into these outlined to avoid repartition of causes of failures.



“The whole concept of a bank revolves on public confidence on the bank’s ability and willingness to deliver on it obligation” (Emekekwe 1994,pg. 1).

The above extract stress on the issue of public confidence as the very point of the existence of any bank. Once the public confidence on any bank is lacking that bank should be on the verge of either packing up its – business or be ready to revitalize its activities in other to be in business.

Emekekwe, on pg. 10 to 105 still went further to explain that it is as a result of this public confidence that the Nigeria Deposit Insurance Corporation (NDIC) was established. According to him, “the issue at stake is not the prevention of Bank Failure in Nigeria peruse, but rather the protector of depositors from the consequences of Bank Failure in Nigeria:. He explained “we are not worried about the loss of deposit by members of the public”.

Anyawaokoro on pages 139 to 140 also stresses on the importance of public confidence in the banking sector since the “banking business thrives on public confidence”. He says “to win and retain public confidence, a bank must be able to convince the public of its stability and display its readiness to repay customers deposits and accommodate genuine credit needs of customers.

One the public withdraws the confidence as a result of Bank Failure in Nigeria, the resultant effect is diversion of deposit from the banking sector to areas where they may not be fully utilized for the overall benefit of the entire economy.



Bank Failure in Nigeria can result to capital flight from the Nigeria banking sector to financial institutions or centers abroad where they van yield higher profit than depositing with bank in Nigeria with vague future.

According to Ude on page 59, citizens of one country can indulge in “directs foreign investment or portfolio investment”. Instead of big time depositor to deposit their idle cash with the bank in Nigeria, they would prefer to invest the funds abroad.

These funds invested abroad goes to develop or improve the economy of the country where it is invested while Nigeria suffers economic see backs.



“For now, over sixteen billion naira investors” fund are trapped in the vaults of the after banks out of which about five billion naira is insured with the NDIC.

Not only will many depositor not get back their money, the league of the unemployed will swell as more than size thousand workers would be thrown into the labour market”

(Semiu Slami, the news, 2nd February, 1998).

This number that would be thrown into the labour market will only go to increase the number of unemployed within the economy. Investors would not be willing to invest whole – heartedly in the banking sector. Which is supposed to acts as an intermediary for borrowers of fund for the establishment of industries, which will employ a large and thus, reduce the number of the unemployed. As a result of this unemployment, the social evil indulged in by the citizen will only be on the increase.



Foreign investors who had interest in investing in the country would shy away from such investment since it would only mean a loss of their hard earned money.

The mineral resources will not be fully exploited for the general benefits of our economy.

This then spells under utilization of our natural resources, if when exported would not yield enough income. This could also laid to low income per capital for citizen within Nigeria since gross nation product is very low compared to size of the population but, where there is “enthronement of foreign economic partners will boost our economy” (Catherine Ajaji, the guardian pg. 17, August 13, 199).



“The growth in the number of institutions operating with the banking industry consequently led to increased competition. Likely to breed sharp practices by some bankers, this would increase the risk interest within the banking industry” (Ugwuanyi; pg. 5).

The establishment of the Nigeria Deposit Insurance Corporation in 1988 as an independent and autonomous institution was to add weight to the existing supervisory and control capabilities of the central bank of Nigeria. Even with this establishment, the processes involved in the liquidation of banks takes to long due to the number involved in the Bank Failure in Nigeria.

The continuous effect is diverted from their primary functions within an economy.

Though it is their duty to maintain internal stability in the financial system of the country, they still have more challenging duties like maintaining the external reserve of the country and formulating new sector, the rigorous activity of the liquidation banks can hinder their efficiency and timely implementation of policies effecting their other functions.

According to Semiu Salami, the liquidation of the banks by the CBN and the official undertakers, Nigeria Deposit Insurance Corporation (NDIC) had inexplicably been delayed for over a year. He were further to explain.

“What hitherto appeared to be a dreaded assignment may have been successfully implemented”.

This illustrates the fact that the process of liquidation is not an easy task for the regulatory authorities in 1998.


“The banking industry is unlike other businesses.

Its soul is confidence once it’s shaken, the bank know it’s time to pack “up” and now in Nigeria, directors must face facts and know that trail avails them once their banks fail. Based on this and for the sake of the entire economy”, “the news, has however, been able to piece together some formulae for early detection of sickness, either marked or not” (the Neves pg. 30, 2 February, 1998).



“If the bank carries a debt portfolio out of proportion to its capital and deposit base, its time for the customer to move his money away. Especially, if most of the loans are unsecured, don’t wait for explanation to run”.



“If you are a high profile depositor, establish an independent grapeuine within the bank once you have information that managers are helping themselves and their friends with the banks money”, know “that it time to move your money”.




If the bank is not a regular player her and does not have a god track record in those market, there is cause for depositors to get about the health of the bank because, distress or failure may be banking at the corner.


This is how solvent the bank is in recent times.

If a depositor will have to wait all day for him to make withdrawals from his own account, it is a sign of trouble either temporary distress or a sign that the bank will soon go under.



If the bank gets suspended from the CBN clearing house for the first time, there is no need to get worried but if it pursuit, it is a sign of ill health that the bank is insolvent.

According to (“the news on page 30).

“What, however gave the public an inking into the fading fortune of some banks that failed was the eventual ouster by CBN of these banks from the clearing house in 1996.

By this time, the banks had failed woefully in their financial obligation to their customers and did not meet the necessary prudential guide lines stipulated by the central bank of Nigeria”.



It is not enough to identify the problems of these banks, with has led to their failure effort will be made towards preventing the re-occurrence of these failure from re-occurring in the future.

The prevention of the major cause outlined earlier will be discussed before a review of the role the control bank of Nigeria in the prevention of Bank Failure in Nigeria.

It’s acknowledge that banks as critical roles to play in the successful implementation of the policies. (Ogwuma 1994, CBN’s litmus test) of the Federal Government but, the degree of the changes which are inconsistent in the policies affect the long term plans of some banks. This is due to the series of minatory take over in which so many policies affecting the banking sector are made, thinking that such policies are in the best interest of the nation. It should be made clear that the banking sector should be under the capable control of the central bank of Nigeria.

The government after reading our or making known the fiscal policies it intends to pursue should allow the Central Bank to stipulate what monetary measure it dream fits tat will aid in the attainment of the goals of the fiscal policy pursued by the government and not for the government to make high pressing demand that would over problem facing most banks in Nigeria. Recruitment’s are based on who you know and not what you qualified to be. “A good number of the practitioners in the industry are non- bankers. They should be executed from core – banking services”. “Catherine Ajayi”.

“The failed banks (recovery of debt) and financial malpractice’s in banks decree number 18 of 1994” should be implemented.

This will punish senior official of distressed banks who deliberately gamble away with depositors funds. This will serve as a lesson to other bank’s directors who have intentions of defrauding their banks. In the professional level, the chartered Institute of bankers of Nigeria (CIBN) tribunal is ready to also try those of it members that are among those senior official awaiting trail and those found guilty would be demanded. This tribunal is to investigate all aggregates of professional misconduct to bring sanity into banking.

(The Guardian, August 13, pg. 17).



The first major step taken to deal with Bank Failure in Nigeria was the banking and regulatory to guide banks and prevent reckeness in providing banking services.

This was strengthened in 1958 by establishing the Central Bank of Nigeria, which was charged with the responsibilities of promoting among other thing monetary stability and sound financial structure. Since its inception, the CBN has attempted to prevent Bank Failure in Nigeria through its formulation and implementation of monetary and banking policies through these measure, the Central Bank has attempted to ensure that the banks remains viable and profitable while contributing to economic growth which, in turn, would strengthen the banks. Effort to achieve these goals are usually replanted in the Central Bank policy guidelines, bank supervision and bank examination.

The deregulation of the financial system since 1986 and subsequent licensing of many banks brought be competition among banks and with it the need to modify the techniques of regulating the banks. The Central bank of Nigeria responded to the challenge by setting in motion measures to enable the banks to perform their roles under a deregulated system. This was further strengthened through the Central Banks’ decree number 24 and the banks and other financial institution decree, number 25 of 1991.

The Emergence of serous bank distress and the failure of banks to meet some of their vital obligation led the Central Bank to explore the causes of their distress which, as noted earlier, was traced fundamentally to the internal abuses and problem of the bank which compromised accountability and discipline to the banking sector was laid by the promulgation, though related, of the failed banks (recovery of debt) and financial malpractice’s decree of 1994 which imposed accountability on those who exploited its absence.

The failed bank tribunals have provided the impetus for restoring accountability and discipline in the system and therefore have assisted in revamping the system. The future prevention of Bank Failure in Nigeria will depend to a significant extent on the sustenance, expansion and improvement of the failed banks tribunals. Other measures to complement the failed banks tribunals are already at different stages of implementation. They include:

a. Re – enkindling discipline through healthy competition and in which the growth of banks are not “rushed” as in the period 1986 to 1991.

b. Allowing the exist of banks, which have failed terminally within minimizing the losses of depositor in other to reduce the erosion of confidence in the system..

c. Minimizing policy shock therapist in heading banks operational problems as witnessed in 1989 through sudden withdrawal of public sector depositor from banks.

d. Promoting professionalism, which would eventually produce a crop of banker, who would comply with banking ethics willingly rather than through the fear of tribunals.

e. Enhancing the supervision of banks in order to enhance among other things early working signals to banks.

The supervision of banks would reveal signals that predict bank distress or failure. Some researchers like Jimoh “1993” and Nyong “1994”, Augusto and company (1994), have developed or tested model for providing early warning signals. The composite bank rating measures is preferred to individual rating measure because the compositor rating technique takes into account a wide range of factors in determining the health of banks.

Composite rating realize on the widely accepted.

CAMEL Characterization where:

C – Capital

A – Assets Quantity

M – Managerial Capabilities

E – Earning Capacity

L – liquidity position

S – Sensitivity to the economic environment

The above listed is use to know the extent or probability of distress or failure.



This work has been discussing the role of Central Bank of Nigeria in the prevention of Bank Failure in Nigeria.

Though there are causes of failure that can be traced back to the direct manipulation of the banking sector by the government in it inconsistent policies that were made over the years before the return of the CBN’s autonomy, the major factors are traced bank to institutional problems in the banking industry, example of this is the poor portfolio management by incompetent directors.

Among measures adopted to checked Bank Failure in Nigeria, the enforcement of accountability through the failed bank tribunals and the use of early warning signals are considered effective for strengthen the banking system and therefore, should be sustained and improved.

The study also indicate the Bank Failure in Nigeria cannot totally be avoided since the healthy competition amongst bank can cause the exit of some banks that may not meet up with the competition, there is the need for such failure to have a very minimal effect on the entire economy to boost public confidence.