BANK ETHICS, BANK FRAUD AND BANK DEPOSITS NEXUS: IMPLICATIONS FOR THE NIGERIAN BANKING INDUSTRY

BANK ETHICS, BANK FRAUD
AND BANK DEPOSITS NEXUS:
IMPLICATIONS FOR THE
NIGERIAN BANKING INDUSTRY
Emmanuel Onah (Department of Banking and
Finance, University of Nigeria, Enugu
Campus.
emma.onah@unn.edu.ng
&
Charles Ubagwu
Department of Banking and Finance,
University of Nigeria, Enugu Campus.
cubagwu@yahoo.com
ABSTRACT
No doubt, bank ethics and bank fraud
have attracted great interest in academic
research recently, especially in Nigeria. A
review of the extant literature suggests
that all knowledge gaps have been filledBook of Abstract
resulting in repetitions that can be
adjudged irrelevant from a very strict
perspective. However, in most of the
cases, fraud is merely mentioned in the
process of discussing ethics and vice versa.
The ethics-fraud nexus seems not to have
been theoretically explored enough by
researchers on bank ethics and bank
fraud. It is the need to fill this gap that has
given rise to this study. Hence, in this
study, we set out to trace the theoretical
link between bank ethics and bank fraud,
and then test the econometric
relationship between bank ethics and
bank deposits using bank fraud as a proxy
for bank ethics. Although many previous
studies in the two areas adopted bank
performance (ROA, EPS, Net income, etc.)
as the dependent variable, this study has
used bank deposits. We reason that
information on unethical behaviour in
banks would first affect depositors’
confidence in the industry (the contagion
principle) before affecting the industry’s
financial performance.
Our a priori
expectation is that unethical practices by
banks (operationalized by the number of
employees involved in bank fraud) have an
inverse
relationship
with
public
confidence in the banking industry
(operationalized by bank deposits). The
expectation suggests that bank fraud is
largely an ethical issue which is believed is
better tackled from the point of staff
recruitment.
Keywords: bank ethics, bank fraud, bank
deposits, Nigeria.

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