It is no longer in dispute that poor financial system practices is the fundamental cause of the current global economic crisis, which has manifested in the reduction of new investments to almost zero level, the collapse of the stock market, increasing unemployment with attendant lack of effective demand. There is hardly any aspect of the economy that has been adversely affected be it financial, real estate, manufacturing or service sectors. Indeed like a fast spreading virus, the financial meltdown which originated from America has permeated every economy to the extent of their interconnectedness to the international financial system.
When the crucial role of the financial system in the development of any economy and in particular function as mobilizer of savings and promoter of investment and in helping in the preservation of the overall balance in the economy is appreciated, the necessity for effective regulation of the operations of the financial institutions becomes imperative.