ABSTRACT:

This paper examines the impact of financial structure on levels of bank performance and stock market development in Nigeria. Using OLS technique of analysis and data from 1970-2004, our result revealed that financial structure, legal/regulatory regime and macroeconomic environment affect bank interest margin. A wide interest margin, as noticed in our model is an indication that banks and stock markets are still inefficient, uncompetitive, oligopolistic and underdeveloped in Nigeria. The study therefore emphasizes the urgent need for Central Bank to deal with the different macroeconomic conditions, deposits insurance regime. financial market conditions that posse as hindrances and rigidities in the financial system.