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ABSTRACT
This study investigated the impact of bank liqudity on stock market liquidity in Nigeria.
Bank liquidity indicators examined are loan to deposit ratio, credit to private sector, bank liquidity ratio. The ex-post-facto research design was adopted and data for the study were collected from Security and Exchange Commission (SEC) statistical bulletin and the Central Bank of Nigeria statistical bulletin. The Multiple regression was applied on dynamic model to determine the impact of bank liquidity on stock market liquidity. E-view 9.0 computer sofware was engaged for the analysis. This study found that loan to deposit ratio, credit to private sector have positive and signficant impact on stock market liquidity, while bank liquidity ratio has positive but not signifcant affect stock market liquidity. This study concludes that bank liquidity has signficant impact on stock market liquidity in Nigeria and recommends that bank management should raise the current loan to deposit ratio because doing so will make more funds availabe for investment at the exchange and boost stock market liquidity, and that investors should pay serious attention to bank liquidity indicatiors because they can be used to predict stock market liquidity.
