COMPARATIVE ANALYSIS OF BANK RESOLUTION REGIME IN NIGERIA, THE UNITED STATES, AND THE UNITED KINGDOM

The financial system in Nigeria, much like those in advanced economies, has long grappled with the dual challenges of unstable liquidity flows and the need for prudent fund management mechanisms. The Nigerian banking sector evolved from an unregulated, colonial-era framework that often led to frequent distress and bank failures due to weak legislative oversight. To safeguard public funds from the traditional burdens of state-backed bailouts, modern legislative interventions introduced specialized resolution safety nets, including the Banking Sector Resolution Cost Fund. Prior to recent structural reforms, traditional bank resolution measures including: replacing management, enforcing capital increments, or utilizing public bailouts, proved largely ineffective in preventing severe liquidity crises. Although contemporary legal regimes established viable resolution tools, significant institutional hurdles exist. Resolution authorities face complex modalities in implementing these mechanisms, while bank depositors, shareholders, and creditors struggle to insulate their financial interests during crises. Additionally, the specific operational burden of running through "dual resolution funds" within Nigeria introduces distinct challenges for domestic banks compared to more consolidated international models. The primary aim of this paper is to examine the legal and institutional mechanisms deployed to manage distressed banks and maintain financial stability across global jurisdictions. Specifically, the paper reviewed the harmonized applications of principal statutes such as BOFIA, the AMCON Act, the NDIC Act, the UK Banking Act 2009, and the US Dodd-Frank Wall Street Reform and Consumer Protection Act to determine how these laws protect resolution funds, enhance regulatory independence from external influence, and impact investors and depositors. This paper adopted a strict doctrinal methodology to conduct a systematic analysis of legal rules, statutory provisions, and institutional frameworks. The comparative analysis revealed substantial regulatory gaps, structural weaknesses, and wide-ranging institutional deficiency within the Nigerian framework. Unlike the United States regime where distinct national and regional banking systems are clearly delineated or the United Kingdom's well spelt-out prudential divisions, the Nigerian system suffers from an operational overlap where the CBN exercises both supervisory and resolution powers, thereby limiting independent statutory growth. The study found that while international jurisdictions have streamlined their safety nets, Nigeria uniquely operates a dual-resolution fund framework that places a severe financial burden on domestic financial institutions and their stakeholders. To remedy these structural flaws, the study recommended immediate legislative intervention to amend the AMCON Act 2015 and BOFIA 2020, specifically prescribing a definitive terminal date or statutory tenor for the Resolution Cost Fund to offer banks a predictable financial horizon. Institutional reforms should focus on granting greater statutory autonomy to the CBN’s resolution unit to eliminate conflicts of interest between supervisory and enforcement roles. The study concluded that transitioning from a "too big to fail" mindset to a systemic "too big to ignore" approach is vital for long-term economic survival.