The stability and soundness of a bank is direct evidence of its solvency and the adequacy of its capital, which translates into global confidence in the banking system. However, because of the interconnectivity of banking operations, it is possible for an otherwise viable institution to overturn that confidence through loss or crisis and contagiously trigger the erosion of confidence in the banking system in general. The control of this systemic tide may be through a proactive bank restoration process orchestrated by strategic leadership responsibility in a regulated environment. This mixed-method-research approach measures the effectiveness of regulatory responses to the banking crisis in Nigeria in relation to the role of transformational leadership for overcoming capital crisis and harnessing the commitment of stakeholders in Nigerian banks. The study focused on the effectiveness of six regulatory methods for managing distress in Nigerian banks using both a secondary data obtained from the regulatory authorities on number of banks salvaged and a survey of stakeholders’ preferences using each restructuring option. These regulatory methods include the imposition of stopgap measures designed to enable the banks to overcome distress, and known as holding or restrictive action, assumption of control and management of the banks by regulators, liquidation, financial; and technical assistance, sale of distressed banks and mergers. While the survey indicates that mergers and sale of banks offered acceptable measures of restructuring, the stakeholders differed in their acceptance of holding action, takeover of management, liquidation, financial and technical support as proactive responses to bank failures. The data also revealed a strong association between transformational leadership and increases in workers satisfaction, effectiveness and motivation.