Credit Creation and Financial Stability of Banks: Evidence in Nigeria

The study examined how bank credit creation affects financial stability in Nigeria from 1981 to 2020. We obtained the data for Central Bank of and World statistical bulletins. Our research looked specifically at agricultural (LnCCAS), manufacturing (LnCCMS), transport communication (LnCCTC), mining quarrying (LnCCMQ) sectors (FS) banks Nigeria. used descriptive statistics, unit root, Johansen co-integration, VECM, Granger Causality techniques 5% level investigate this. root demonstrates that all variables were stationary first differences, requiring which reveals presence long-run form. VEC model LnCCAS LnCCMS are positive significant; LnCCMQ is negative insignificant; while LnCCTC but insignificant FS For causality, there no directional relationship between each LnCCMS, LnCCMQ, LnCCTC, FS. conclude by their On recommendation, we advocated continuous provision economy, as these significantly promote stability. Furthermore, should prioritise economy's transportation because they have potential stimulate among Nigerian banks. As a result, limit amount available economy.