Abstract The effectiveness of regulatory reforms in improving financial stability remains a central issue in banking regulation, particularly in developing economies where institutional capacity and enforcement challenges persist. In Nigeria, the enactment of the Banks and Other Financial Institutions Act (BOFIA) 2020 represents a major regulatory reform aimed at strengthening supervision, governance, and risk management within the banking sector. This study assesses the impact of regulatory reforms and non-performing loans on financial stability in Nigeria over the period 2008-2023. Financial stability is measured using a composite banking stability index, while regulatory reform is captured through a policy dummy distinguishing the pre- and post-BOFIA 2020 periods. Non-performing loans and capital adequacy are included as key control variables. Employing regression analysis and Granger causality tests, the study finds that regulatory reforms have a positive and statistically significant effect on financial stability, indicating that enhanced supervisory powers and regulatory enforcement contribute to systemic resilience. However, non-performing loans exert a strong negative impact on financial stability, highlighting persistent asset quality challenges that weaken the effectiveness of reforms. Capital adequacy is found to complement regulatory reforms by strengthening banks' loss-absorbing capacity. The findings contribute to institutional regulation theory by providing empirical evidence that regulatory reforms improve stability when supported by adequate capitalization and effective credit risk management. From a policy perspective, the study emphasizes the need for sustained enforcement of BOFIA 2020, improved loan recovery frameworks, and stronger coordination between regulators and the judicial system. The study concludes that while regulatory reforms have strengthened Nigeria's financial stability, addressing non-performing loans remains critical to achieving durable systemic resilience.