International Journal of Financial Research,Canada July 2013 Volume 4 Number 3 pp.70-82. The banking industry has lost its position as the bedrock of Nigerian economy due to abysmal performance of the economy. The industry is known to have contributed in no small measure to the development of the economy. This industry is the enabling hub of national and global payment systems, which facilitate trade transactions within and amongst numerous national, regional and international economic units and by so doing; it enhances commerce, industry and exchange. Poor investment policy in the industry has contributed negatively to large non-performing loans and advances, financial distress and institutions liquidation. The objective of this paper is to assess the investment policies in the banks with a view to suggesting better policy for better management of assets and liabilities for distress resolution. The research is empirical. The study covers the banking industry with the use of corporate questionnaire to gather data from each of the sample representatives which are twenty four universal banks and five industry regulators. Multivariate Analysis of Variance (MANOVA) was used to compute the collated data. The results show that there is poor management of assets and liabilities, poor investment policies in the industry, the banks grow assets more than liabilities, the banks resulted into using depositorsâ€™ money to acquire assets and they failed to comply with Central Bank of Nigeria monetary policies. The paper recommends among others that the industry and the regulators and supervisory agents should institute a good and sound investment policy for effective management of assets and liabilities in the industry.