CAPITAL MARKET INSTRUMENTS AND THE PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA OSAYI, VALENTINE IGBINEDION 1 AND NWANI, OYEMAECHI CHRISTOPHER 2 1 Lecturer, Department of Banking and Finance, Federal University, Wukari, PMB 1020, Taraba, State, Nigeria. E-mail: Valbobbies@yahoo.com / Osayi@fuwukari.edu.ng 2 Lecturer, Department of Banking and Finance, Federal University Wukari, Taraba, Nigeria Received: 19 March 2024; Revised: 11 April 2024; Accepted 16 April 2024; Publication: 30 June 2024 Abstract: e relationship between capital market instruments and deposit money banks is multifaceted and symbiotic, contributing significantly to the dynamics of the financial system. is study empirically investigated the relationship between capital market instruments and the performance of deposit money banks in Nigeria between 1992 and 2022. Annual data on the various variables of capital market instruments for Nigeria were collected and analyzed using ordinary least square (OLS) method. From the analyzed data, government bond has a very positive and significant effect on the performance of deposit money banks in Nigeria as measured by total asset of deposit money banks in Nigeria, while corporate bond has a positive but not significant impact on the performance of deposit money banks in Nigeria. Also, it was observed from the study that there is negative and not significant impact of monetary policy rate on the performance of deposit money banks in Nigeria. erefore, the study concludes that capital market and its instruments are veritable investment portfolio outlets for deposit money banks in Nigeria in their choice of portfolio investments. e study therefore, recommends that governments at all levels in Nigeria should further cultivate the habit of patronizing the capital market by floating bonds in the domestic market in their borrowing decisions. is would not only encourage the development of the Nigerian capital market but would encourage deposit money banks especially in the light of recent bank recapitalization as announced by the central bank of Nigeria, and other entities to patronize the market for their portfolio investment decisions. Also, the Securities and Exchange Commission (SEC) as the sole regulator of the capital market in Nigeria should formulate policies that would attract the floating of corporate bonds by corporate entities in the market in order to be able to raise funds for their operations. Keywords: Capital Market Instruments, Deposit Money Banks, Corporate Bonds To cite this paper: OSAYI, Valentine Igbinedion & NWANI, Oyemaechi Christopher (2024). Capital Market Instruments and the Performance of Deposit Money Banks in Nigeria. Journal of Quantitative Finance and Economics. 6(1), 67-87. https://DOI:10.47509/JQFE.2024.v06i01.04 ARF INDIA Academic Open Access Publishing www.arfjournals.com Journal of Quantitative Finance and Economics Volume 6; Number 1, 2024, pp. 67-87 https://DOI:10.47509/JQFE.2024.v06i01.04