DOMESTIC DEBT AND ECONOMIC STABILITY: ANALYZING NIGERIA'S FISCAL DYNAMICS

The banking sector plays a pivotal role in ensuring financial system stability by serving as an intermediary between savers and borrowers, managing risks, and complying with regulatory requirements. To sustain profitability and operational resilience, banks increasingly adopt Governance, Risk, and Compliance (GRC) frameworks, which integrate governance structures, risk management practices, and regulatory compliance. Despite their importance, the effectiveness of GRC in enhancing financial performance remains a subject of ongoing debate, particularly during periods of economic turbulence. The COVID-19 pandemic underscored these challenges, as evidenced by the decline in Return on Assets (ROA) from 8% in 2018 to –1% in 2020, signaling vulnerabilities in banking profitability. This study investigates the moderating role of human capital in strengthening the relationship between independent commissioners and bank profitability. Human capital, encompassing knowledge, skills, and expertise of employees, is posited as a critical factor that can amplify the effectiveness of governance mechanisms in fostering financial stability and performance. By examining the interaction between governance structures and human capital within the banking sector, this research provides insights into how banks can reinforce resilience against external shocks. The findings are expected to contribute to both theoretical discourse and practical strategies, offering recommendations for policymakers, regulators, and banking institutions on leveraging GRC frameworks and human capital to enhance long-term profitability and stability