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Difficulty: EasyFinancial System Regulatory Bodies: SEC and NDIC

The Securities and Exchange Commission (SEC) is the primary government agency responsible for insuring deposit liabilities of licensed commercial banks in Nigeria.

Answer: Answer

Answer

False. The Nigeria Deposit Insurance Corporation (NDIC) is responsible for insuring bank deposit liabilities, while the Securities and Exchange Commission (SEC) regulates the capital market.
The statement is false because deposit insurance for commercial banks is provided by the Nigeria Deposit Insurance Corporation (NDIC). The Securities and Exchange Commission (SEC) acts as the apex regulatory authority for the Nigerian capital market.

Step-by-Step Solution

1
Identify the primary responsibility specified in the statement
The statement assigns the function of insuring bank deposit liabilities to the Securities and Exchange Commission (SEC).
Evaluating the statement requires identifying which regulatory body actually performs bank deposit insurance.
2
Compare the statutory roles of SEC and NDIC
The Nigeria Deposit Insurance Corporation (NDIC) protects bank depositors and insures deposit liabilities, whereas SEC regulates the securities and capital markets.
Distinguishing between banking sector deposit protection (NDIC) and capital market regulation (SEC) reveals that the statement misinterprets SEC's role.

Key Concept

Distinction between SEC and NDIC statutory functions
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Topics

Financial System Regulatory Bodies: SEC and NDIC

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