## Executive Summary ## Source details **Canonical URL:** [Executive Summary](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/dp/2015/_afr1503.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/dp/2015/_afr1503.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/dp/2015/_afr1503.pdf.json) --- ### Overview of Pan-African Banks (PABs) and Expansion - Rapid expansion of pan-African banks (PABs) in recent years. - Seven major PABs have a presence in at least ten African countries. - Headquarters of the seven major PABs: three in Morocco, two in Togo, one in Nigeria, and one in South Africa. - Additional banks, primarily from Kenya, Nigeria, and South Africa, have a regional presence with operations in at least five countries. - PABs have a systemic presence in around 36 countries. - PABs are now much more important in Africa than the long-established European and American banks. - Expansion mainly through subsidiaries via acquisition of existing banks; only a few PABs have used greenfield investments. - Subsidiarization reflects regulators’ wish to minimize contagion given relatively high risks associated with banking activity in the continent. ### Opportunities and Benefits - Expansion reflects increased economic integration within Africa and contributes to: - improved competition; - support for financial inclusion; - greater economies of scale. - PABs have been filling the recent gap left by European banks and are becoming the lead arrangers of syndicated loans. ### Risks, Oversight Challenges, and Financial Soundness - Rapid expansion poses oversight challenges that may increase systemic risks if unaddressed. - Supervisory capacity is constrained and under-resourced in most of Africa. - PABs raise the importance of: - transparency and disclosure; - good governance; - strong prudential oversight; - a legal and regulatory framework supporting effective and comprehensive supervision and crisis management, particularly in countries that are homes to major PABs. - Progress is being made in most areas but efforts to strengthen oversight in some cases need intensification. - Greater integration increases exposure to spillovers from cross-border shocks. ### Governance Challenges - Fitness and propriety of owners and shareholders, particularly of bank holding companies, is not always fully assessed. - Ownership structures in some cases are opaque. - Disclosure in Africa is less extensive than elsewhere. - Lack of a single accounting standard across the continent makes assessment of banks’ overall situation difficult. - Conduct-of-business oversight is only now emerging in many countries. - Lack of regulatory oversight of bank holding companies and consolidated supervision in some home jurisdictions needs urgent attention. - At least two large PABs operate as subsidiaries of unregulated bank holding companies. - Separately capitalized subsidiaries reduce but do not eliminate contagion risk—subsidiaries may have exposures to their parents or to other bank or nonbank subsidiaries within the same group. ### Cross-Border Supervision, Crisis Management, and Resolution - Cooperation on cross-border supervision has started but enhanced collaboration is critical. - Central Bank of Nigeria requires a memorandum of understanding with home regulators before allowing a bank to be established in its jurisdiction. - Quarterly meetings of the West African Monetary Institute include discussions of PAB issues. - Several joint inspections have taken place and supervisory colleges established for a few PABs; others are planned. - Supervisory colleges need to be established for all PABs and meet at least once a year at the senior supervisory level. - Memorandums of understanding that ensure full exchange of information are needed between all homes and hosts. - Sustained efforts are needed on cross-border resolution: - Without a resolution mechanism, supervision alone may have limited effectiveness. - Most African countries also need to enhance resolution at the national level. - Ring-fencing approaches reduce spillover risks but cannot avoid the need for cross-border collaboration. - Ex ante understandings are needed across jurisdictions as to respective responsibilities in the event of difficulties. - Regional currency unions face particular challenges on the interface of responsibilities between regional and national authorities: - West African Monetary Union (WAMU) operates as a single regional monetary and supervisory authority, but with a licensing and resolution role for national authorities. - Bank licenses are issued by the national Minister of Finance (MOF) after a binding opinion by the Banking Commission and are revoked by the national MOF upon decision of the Banking Commission; the national MOF has the right to appeal at the West African Economic and Monetary Union Council of Ministers. - National responsibility for bank resolution, while supervision is conducted at the regional level, can seriously complicate handling of bank problems. - Given that WAMU is home to two major PABs and host to many others, developing appropriate arrangements to reconcile regional and national interests is paramount. - Regional groupings that are homes or hosts of major PABs should examine the scope for establishing a single resolution mechanism. ### Strategic Oversight, Coordination, and Reform Implementation - The reform agenda is formidable; strategic oversight could assist implementation. - Existing arrangements are either not specifically focused on pan-African banking issues or may include too wide a participation for effective decision making. - Proposal: establish a PAB Supervisory Oversight Committee comprising the home regulators/supervisors and central banks of the major PABs (Banque Centrale des Etats de l’Afrique de l’Ouest, Kenya, Morocco, Nigeria, and South Africa), with the chair of the Association of African Bank Supervisors, to: - drive the reform agenda; - coordinate on emerging problems; - integrate into the African financial systems the best practices in financial sector management emerging in global fora; - provide assistance to lagging regulators/supervisors and other authorities, either from within the group or from outside sources such as multilateral agencies. - Intensify coordination and collaboration between the Central Bank of Nigeria and the Banking Commission due to their central oversight role for several major PABs. ### Summary of Key Recommendations — Selected Items with Priority - Regulatory and Supervisory Harmonization - Ensure full regulation and supervision of bank holding companies. — H - Implement consolidated and risk-based supervision. — H - Accelerate adoption of International Financial Reporting Standards in all countries that are home or hosts to major pan-African banks (PABs). — H - Enhance data availability, for example, on banks’ cross-border exposures. — H - Harmonize and align key prudential norms with international standards (for example, concentration limits), in all countries that are home or major hosts to major PABs. — H - Consider subjecting PABs with regional systemic importance to Basel III domestic systemically important bank requirements. — H - Governance - Ensure fit-and-proper criteria are applied to boards and management of banks and bank holdings both at time of licensing and periodically thereafter. — H - Cross-border Collaboration - Ensure memorandums of understanding feature full exchange of information between home and host authorities for all major PABs. — H - Broaden range of joint inspections to include all major PABs. — H - Introduce supervisory colleges for all PABs. Ensure that each college meets at least once a year. — M - Enhance the function of supervisory colleges by introducing a two-tier structure of core and universal membership. — H - Clarify countries’ respective responsibilities in the event of liquidity or solvency difficulties in a PAB. Run joint simulation exercises. — H - Financial Stability - Ensure through macro and micro stress tests and other techniques that national financial systems are sound even in the event of cross-border contagion from PABs. Share national financial stability findings. — M - Resolution and Safety Net - Ensure adequate legal framework, featuring special resolution regimes, are in place to resolve failing banks and bank holdings, in conformity with the Financial Stability Board Key Attributes. — H - Extend cooperation to cover resolution of PABs, establish crisis management groups for systemically important ones and require them to develop recovery and resolution plans. — H - Strategic Oversight - Establish a PAB Supervisory Oversight Committee of the home regulators and central banks of the major PABs (i.e., Banque Centrale des Etats de l’Afrique de l’Ouest, Kenya, Morocco, Nigeria, and South Africa), with the chair of the Association of African Bank Supervisors, in order to drive the reform agenda and coordinate on emerging problems. — M - Regional Integration - Regional bodies such as the Banque Centrale des Etats de l’Afrique de l’Ouest and the East Africa Community to review their regional structure to improve their ability to provide effective regional financial sector oversight and management capacity in the face of PAB development, for instance as regards safety nets and resolution mechanisms. — M ### Technical Assistance and IMF Role - Pursuing the reform agenda expeditiously will require extensive technical assistance. - The IMF is prepared to continue to provide assistance in its areas of responsibility and, if helpful, to liaise with other providers to help ensure a comprehensive program to safeguard financial stability. *Source: Executive Summary, _afr1503.* ### Executive Summary ...................................................................................................... ### Executive Summary ### Overview of Pan-African Banks (PABs) and Expansion - There has been a rapid expansion of pan-African banks (PABs) in recent years. - Seven major PABs have a presence in at least ten African countries. - Three of these seven are headquartered in Morocco, two in Togo, and one each in Nigeria and South Africa. - Additional banks, primarily from Kenya, Nigeria, and South Africa, have a regional presence with operations in at least five countries. - PABs have a systemic presence in around 36 countries. - Overall, the PABs are now much more important in Africa than the long-established European and American banks. - PABs have expanded mainly through subsidiaries, via the acquisition of existing banks; only a few PABs have used greenfield investments. - Subsidiarization reflects regulators’ wish to minimize contagion, particularly given the relatively high risks associated with banking activity in the continent. ### Opportunities and Benefits - Expansion of PABs reflects the increase in economic integration within Africa and is contributing to: - improved competition; - support for financial inclusion; - greater economies of scale. - PABs have been filling the recent gap left by European banks and are becoming the lead arrangers of syndicated loans. ### Risks, Oversight Challenges, and Financial Soundness - Rapid expansion of PABs poses oversight challenges that, if unaddressed, may increase systemic risks. - Supervisory capacity is already constrained and under-resourced in most of Africa. - PABs raise the importance of: - transparency and disclosure; - good governance; - strong prudential oversight; - a legal and regulatory framework that supports effective and comprehensive supervision and crisis management, particularly in the countries that are homes to major PABs. - Progress is being made in most areas but efforts to strengthen oversight in some cases need to be intensified. - Greater integration increases exposure to spillovers from cross-border shocks. ### Governance Challenges - Fitness and propriety of owners and shareholders, in particular of bank holding companies, is not always fully assessed. - Ownership structures in some cases are opaque. - Disclosure in Africa is less extensive than elsewhere. - The lack of a single accounting standard across the continent makes assessment of the banks’ overall situation difficult. - In many countries conduct-of-business oversight is only now emerging. - The lack of regulatory oversight of bank holding companies and their supervision on a consolidated basis in some home jurisdictions needs to be addressed urgently. - At least two large PABs operate as subsidiaries of unregulated bank holding companies. - Separately capitalized subsidiaries reduce but do not eliminate contagion risk—subsidiaries may have exposures to their parents or to other bank or nonbank subsidiaries within the same group. ### Cross-Border Supervision, Crisis Management, and Resolution - Cooperation on cross-border supervision has started but enhanced collaboration is critical. - The Central Bank of Nigeria requires a memorandum of understanding with home regulators before allowing a bank to be established in its jurisdiction. - Quarterly meetings of the West African Monetary Institute include discussions of PAB issues. - Several joint inspections have taken place and supervisory colleges established for a few PABs; others are planned. - Supervisory colleges need to be established for all PABs and meet at least once a year at the senior supervisory level. - Memorandums of understanding that ensure full exchange of information are needed between all homes and hosts. - Sustained efforts are needed on cross-border resolution. - Without a resolution mechanism, supervision alone may have limited effectiveness. - Most African countries also need to enhance resolution at the national level. - Ring-fencing approaches reduce spillover risks but cannot avoid the need for cross-border collaboration. - Ex ante understandings are needed across jurisdictions as to respective responsibilities in the event of difficulties. - Regional currency unions, such as the West African Monetary Union (WAMU), face particular challenges on the interface of responsibilities between regional and national authorities. - WAMU operates as a single regional monetary and supervisory authority, but with a licensing and resolution role for national authorities. - Bank licenses are issued by the national Minister of Finance (MOF) after a binding opinion by the Banking Commission and are revoked by the national MOF upon decision of the Banking Commission. However, the national MOF has the right to appeal at the West African Economic and Monetary Union Council of Ministers. - National responsibility for bank resolution, while supervision is conducted at the regional level, can seriously complicate the handling of bank problems. - Given that WAMU is home to two major PABs and host to many others, developing appropriate arrangements to reconcile regional and national interests is paramount. - Regional groupings that are homes or hosts of major PABs should examine the scope for establishing a single resolution mechanism. ### Strategic Oversight, Coordination, and Reform Implementation - The agenda of reforms is formidable; strategic oversight could assist implementation. - Existing arrangements are either not specifically focused on pan-African banking issues or may include too wide a participation for effective decision making. - It is proposed that a new group be set up: a PAB Supervisory Oversight Committee comprising the home regulators/supervisors and central banks of the major PABs (Banque Centrale des Etats de l’Afrique de l’Ouest, Kenya, Morocco, Nigeria, and South Africa), with the chair of the Association of African Bank Supervisors, to: - drive the reform agenda; - coordinate on emerging problems; - integrate into the African financial systems the best practices in financial sector management that are emerging in the global fora; and - provide assistance to lagging regulators/supervisors and other authorities, either from within the group, or from outside sources such as the multilateral agencies. - Intensify coordination and collaboration between the Central Bank of Nigeria and the Banking Commission, as these two agencies are at the forefront of oversight responsibility for several major PABs. ### Summary of Key Recommendations (Table 1) — Selected Items with Priority - Regulatory and Supervisory Harmonization - Ensure full regulation and supervision of bank holding companies. — H - Implement consolidated and risk-based supervision. — H - Accelerate adoption of International Financial Reporting Standards in all countries that are home or hosts to major pan-African banks (PABs). — H - Enhance data availability, for example, on banks’ cross-border exposures. — H - Harmonize and align key prudential norms with international standards (for example, concentration limits), in all countries that are home or major hosts to major PABs. — H - Consider subjecting PABs with regional systemic importance to Basel III domestic systemically important bank requirements. — H - Governance - Ensure fit-and-proper criteria are applied to boards and management of banks and bank holdings both at time of licensing and periodically thereafter. — H - Cross-border Collaboration - Ensure memorandums of understanding feature full exchange of information between home and host authorities for all major PABs. — H - Broaden range of joint inspections to include all major PABs. — H - Introduce supervisory colleges for all PABs. Ensure that each college meets at least once a year. — M - Enhance the function of supervisory colleges by introducing a two-tier structure of core and universal membership. — H - Clarify countries’ respective responsibilities in the event of liquidity or solvency difficulties in a PAB. Run joint simulation exercises. — H - Financial Stability - Ensure through macro and micro stress tests and other techniques that national financial systems are sound even in the event of cross-border contagion from PABs. Share national financial stability findings. — M - Resolution and Safety Net - Ensure adequate legal framework, featuring special resolution regimes, are in place to resolve failing banks and bank holdings, in conformity with the Financial Stability Board Key Attributes. — H - Extend cooperation to cover resolution of PABs, establish crisis management groups for systemically important ones and require them to develop recovery and resolution plans. — H - Strategic Oversight - Establish a PAB Supervisory Oversight Committee of the home regulators and central banks of the major PABs (i.e., Banque Centrale des Etats de l’Afrique de l’Ouest, Kenya, Morocco, Nigeria, and South Africa), with the chair of the Association of African Bank Supervisors, in order to drive the reform agenda and coordinate on emerging problems. — M - Regional Integration - Regional bodies such as the Banque Centrale des Etats de l’Afrique de l’Ouest and the East Africa Community to review their regional structure to improve their ability to provide effective regional financial sector oversight and management capacity in the face of PAB development, for instance as regards safety nets and resolution mechanisms. — M ### Technical Assistance and IMF Role - Pursuing the reform agenda expeditiously will require extensive technical assistance. - The IMF is prepared to continue to provide assistance in its areas of responsibility and, if helpful, to liaise with other providers to help ensure a comprehensive program to safeguard financial stability. *Source: Executive Summary, _afr1503.* ### Box 1. Increasing Intraregional Trade Linkages in Sub-Saharan Africa ### Box 1. Increasing Intraregional Trade Linkages in Sub-Saharan Africa ### Historical patterns and recent trends - Historically, intraregional trade in sub-Saharan Africa (SSA) has been low and trade links with Europe, the United States, and Asia still outweigh intraregional trade. - Intraregional trade and financial linkages have been expanding rapidly in recent years and "are bound to grow further in the coming years (IMF 2012b)." - Cross-border expansion of Pan-African Banks (PABs) has been partly influenced by increasing trade flows and expansion of companies into new markets in SSA; cross-border banks from Kenya, South Africa, or Nigeria cited following corporate clients abroad as one reason for expansion. ### Country-level export shares and patterns (2008–13) - The share of SSA trade in total trade increased in four PAB home countries since 2008. - Kenya: share of trade with SSA is highest among the four countries, "around 35 percent," with the largest part within the East Africa Community (EAC). - Morocco: share of trade with SSA is the smallest of the four countries, but exports to the West Africa Monetary Zone and West African Economic and Monetary Union countries "have increased strongly in the last few years." - Nigeria: exports to SSA are "recovering from a low of 8 percent in 2011," a movement that "might be mostly driven by oil prices." - Data period referenced: 2008–13 (Direction of Trade Statistics). ### Trade flows to selected economic regions (2008–13) - Exports to SSA and to subregions such as EAC, WAEMU, and WAMZ are presented for Nigeria, South Africa, Morocco, and Kenya for 2008–13 (figures shown in the source). - Note definitions used: EAC = East African Community; SSA = sub-Saharan Africa; RHS = right-hand scale; WAEMU = West African Economic and Monetary Union; WAMZ = West African Monetary Zone. ### Benefits and channels from growing Pan-African banking groups - Anecdotal and empirical evidence point to several benefits from PAB expansion: - Improved competition and economies of scale, especially in host countries with small local markets. - Driving innovation and offering opportunities to enhance financial inclusion; in some cases contributing to lowering costs (example: EAC). - African banks have become lead arrangers for syndicated loans, "filling the recent gap left by European banks (IMF 2014b and Figure 3)." - Expansion increased diversification effects for home countries and provided further growth opportunities. - Box 2 synthesis: benefits categorized into competition and efficiency; financial deepening and inclusion; and stability. - Competition and Efficiency: cross-border banks can increase competition, access to higher skills and expertise, better access to capital, economies of scale, and improved governance structures; empirical studies show positive associations with lower spreads and higher efficiency in EAC. - Financial Deepening and Inclusion: potential to foster inclusion by reaching underserved segments, but outcomes depend on whether banks "cherry pick" high-end customers; anecdotal evidence that PABs expand branches and export innovative business models (examples: Nigerian banks in WAMZ; Moroccan or Kenyan banks). - Financial Stability: cross-border banks can provide diversification benefits when business cycles are not synchronized and can induce supervisory upgrades (e.g., IFRS accounting and Basel II/III standards). However, cross-border banks can also propagate shocks from home countries, creating contagion risks; empirical literature shows mixed results depending on shock type and subsidiary structure. ### Risks, supervisory challenges, and financial infrastructure needs - As PABs expanded in reach and complexity, "significant supervision gaps, governance issues, and questions about cross-border resolution have emerged." - Countries are at different levels of implementing international standards; examples: some countries have implemented Basel II standards, whereas for others it is still "work in progress." - These issues "could pose risks to national and regional financial stability." - IMF technical assistance on banking supervision and regulation, including strengthening legal frameworks to SSA, "have increased in recent years," including through regional technical assistance centers. - Well-functioning financial infrastructure is important both nationally and cross-border: - Needs: efficient payment and settlement systems; credit rating agencies; credit information systems with comparability across countries; dispute resolution; consumer protection mechanisms. - Payment and settlement systems consistency across countries is necessary to avoid payment difficulties with adverse effects for financial stability. - Examples of cross-border integration: West African Economic and Monetary Union (currency union); East African Payments System launched in 2013; recent introduction of a settlement system for regional transactions in the Southern African Development Community. ### Financial sector supervisory standards and heterogeneity (Box 3 highlights) - SSA countries operate at varying stages of implementation of international standards: - A number of countries have moved to International Financial Reporting Standards (IFRS). - Implementation of Basel II standards "has only been completed in a handful of countries." - "An important part of depositor protection, namely depositor insurance, is missing in the majority of countries." - Selected compliance and implementation indicators (as reported in the source): - Accounting Standard: many countries listed as "IFRS," some as "National," some "IFRS Plan," and some "N/A." - Capital Adequacy Standard (Basel II status): entries include "No Basel II yet," "Basel II in progress," "Basel II," "Parts of Basel II/III," and "Basel III" (South Africa). - Basel Core Principles compliance: categories reported as "<50%", "50–80%", ">80%", "N/A." - Deposit Insurance: many entries "No Dep. Ins."; some "Implemented." - Asset Classification (threshold of days in arrears after which loans are classified as nonperforming): entries include "< 90 days", "90 days", "> 90 days", "N/A", and "91 days" (Zimbabwe). - Examples from table (verbatim entries preserved): - Botswana: "IFRS", "Basel II in progress", ">80%", "No Dep. Ins.", "90 days". - Kenya: "IFRS", "Parts of Basel II/III", "50–80%", "Implemented", "90 days". - Morocco: "IFRS", "Parts of Basel III", ">80%", "Implemented", "90 days". - Nigeria: "IFRS", "Basel II in progress", "50–80%", "Implemented", "90 days". - South Africa: "IFRS", "Basel III", ">80%", "No Dep. Ins.", "90 days". - Zambia: "IFRS", "No Basel II yet", ">80%", "No Dep. Ins.", "90 days". - Figure 4 in source presents country-level categorization for "Basel II Implementation" with categories: "No information available", "No Basel II implementation yet", "Basel II implementation in progress", "Basel II implemented." ### Historical precedents and lessons - Past cross-border banking failures in Africa had high costs: International Bank of West Africa and Meridien failed in the 1990s; Bank of Credit and Commerce International also failed after extensive operations on the continent; SSA countries "suffered significant losses, setting back financial integration." - The global financial crisis, while having relatively limited effects on Africa, "demonstrated the difficulties in managing and resolving cross-border institutions, even in advanced economies where the supervisory infrastructure is most developed." *Box 1. Increasing Intraregional Trade Linkages in Sub-Saharan Africa, IMF.* ### Box 4. IMF Technical Assistance on Banking Supervision and Regulation to Sub-Saharan Africa ### Box 4. IMF Technical Assistance on Banking Supervision and Regulation to Sub-Saharan Africa ### IMF technical assistance (TA) activities and regional capacity building - The IMF has been progressively increasing TA in banking supervision and regulation across sub-Saharan Africa (SSA), including cross-border and consolidated supervision and strengthening of legal frameworks. - The IMF operates nine Regional Technical Assistance Centers (AFRITACs) worldwide; five are based in SSA: - Central AFRITAC (AFC) based in Gabon - West AFRITAC (AFW) based in Côte D’Ivoire - East AFRITAC (AFE) based in Tanzania - South AFRITAC (AFS) based in Mauritius - WEST AFRITAC 2 (AFW2) based in Ghana - An African Training Institute has been opened in Mauritius to contribute to building capacity of African authorities, including on banking regulation and supervision issues. - Charts in the source show an increase in TA delivered to Africa on banking supervision and regulation by the IMF in general and by the AFRITACs in particular (Technical Assistance to Sub-Saharan Africa on Banking Supervision and Regulation: FY13, FY14, FY15; Technical Assistance by IMF Technical Assistance Centers on Banking Supervision and Regulation (FTEs): FY13, FY14, FY15). - AFRITACs activities: - Organized seminars and workshops on consolidated and cross-border supervision. - Delivered hands-on TA targeted at practical application of consolidated supervision. - Assisted in enhancing cross-border supervisory frameworks and establishing supervisory colleges. - Notable TA success stories: - AFE assisted the Central Bank of Kenya in organizing a first East African supervisory college for a cross-border bank and continued establishment of such colleges for other Kenyan banking groups. - TA helped the Central Bank of Kenya develop a structured approach to assess the regulatory and supervisory framework of host authorities of Kenyan banks’ subsidiaries. ### Macro-financial backdrop and risks to financial stability - Growth context: - Region’s average growth rate rose from 2½ percent in 1980–94 to about 5 percent during 2008–13. - SSA has become the second fastest growing region after emerging Asia. - Two-thirds of the countries in SSA have enjoyed 10 or more years of uninterrupted growth; a quarter have grown without interruption for 20 years. - Real GDP per capita doubled in the median SSA country. - Global spillovers: - A 1 percentage point growth slowdown in the rest of the world leads to an estimated half percentage point slowdown in SSA (Drummond and Ramirez 2009). - A 100 basis point increase in the spread of three-month London interbank offered rate versus U.S. Treasury bills reduces growth in SSA countries by an estimated ½ percentage point. - Key macroeconomic risks that could give rise to financial stress in SSA: - Slowing of global trade - Sustained lower commodity prices - Financial impact of the tightening of monetary policy in advanced countries - Transmission channels and procyclicality: - The financial sector amplifies the business cycle via changes in asset values and leverage. - Booms can reinforce bank capital through increased profitability and capital gains, fueling further credit expansion. - Upturns can build vulnerabilities: increasing liquidity, maturity, and foreign exchange mismatches; concentration in particular asset types (e.g., real estate). - Downturns can trigger systemwide problems: declining collateral values, insufficient capital, reduced credit, and liquidity stress from depositor confidence shocks. ### Risks from expansion of pan-African banks (PABs) and cross-border contagion - Expansion of PABs increases contagion risk and raises financial stability concerns due to nascent consolidated supervision in some cases. - Contagion channels run both ways: - From parent bank to subsidiary - From subsidiary to parent bank - Across subsidiaries of the same group (including via syndicated loans and interconnections) - Subsidiarization and ring-fencing: - Subsidiaries are separate entities and separately capitalized, which can provide protection; ring-fencing may include ex ante and ex post measures to restrict cross-border intragroup transfers. - Data and stress-testing limitations: - Cross-border contagion analysis has largely not been included in FSAP stress tests to date due to the recent expansion of PABs, small relative size of many cross-border subsidiaries, and lack of data on cross-border transactions and intragroup exposures. ### Systemic importance and structure of cross-border banking groups - Geographic and structural concentration: - Seven banking groups dominate in terms of geographical dispersion. - Ecobank operates in 33 SSA countries; Standard Bank is the largest group by balance sheet size. - Measures of systemic importance (absent more elaborate measures due to data limits): - Operation deemed systemically important if deposit share in total banking system deposits exceeds 10 percent; or if asset share exceeds 7 percent of GDP. - Key systemic-importance findings: - Almost 30 percent of the operations of PABs are systemically important. - Excluding domestic operations, this measure falls slightly below one-quarter. - Around 30 percent of systemically important operations have a deposit share exceeding one-quarter of total banking deposits in the respective countries. - Examples: - Standard Lesotho Bank manages 52 percent of customer deposits in Lesotho. - Ecobank Centrafrique manages 72 percent of deposits in the Central African Republic. - Around 30 percent of the operations of foreign banking groups are systemically important. - Of foreign banking group systemic subsidiaries, around 25 percent manage more than a quarter of customer deposits in their host countries. - Examples of foreign bank subsidiary concentration: Barclays in Seychelles; Caixa Geral de Deposits in Cape Verde. - Market concentration and asset shares: - South Africa: four largest banks (including BAGL) have almost 90 percent of total deposits. - Unconsolidated assets of the four largest South African banks (including BAGL) together account for about 90 percent of South African GDP; consolidated assets are 114 percent of GDP. - Consolidated assets of the three large Moroccan banks account for 108 percent of GDP in their home market. - Nigerian and Kenyan large cross-border banks together account for around 21 percent of Nigerian GDP and 28 percent of Kenyan GDP, respectively. - Share of cross-border subsidiaries in consolidated assets (examples and comparisons): - For South African banks, asset share of cross-border subsidiaries in SSA is less than 15 percent. - For BMCE, the asset share reaches 24 percent. - For most Nigerian banks, cross-border subsidiaries contribute less than 10 percent to total assets; United Bank for Africa is the exception with 15 percent. - For Kenyan banks, the average share is 22 percent. - For some banks incorporated in small home markets (e.g., Togo), cross-border subsidiaries represent the dominant part of balance sheets: ETI and Oragroup have the asset share of cross-border subsidiaries in SSA exceeding 90 percent. - For foreign banks, subsidiaries in SSA represent less than 5 percent of total assets. ### Structure, operations, and governance of major PABs - Ownership and holding structures: - Major PABs often have complex holding structures with ultimate holdings and subholdings, including cross-holdings; some financial holdings are not regulated and are sparsely supervised. - Banking is the dominant activity; groups may include insurance, microfinance, investment activities, securities dealing, leasing, and some nonfinancial activities. - Shareholding concentration varies: - ETI and Standard Bank: major shareholders hold at most a quarter of shares each; shareholders include SSA and international investors (e.g., International Finance Corporation, Industrial and Commercial Bank of China). - Attijariwafa major shareholder: SNI Group. - BMCE major shareholders: FinanceCom Group and BFCM-Holding. - Oragroup and Nedbank majority owned by investment companies (ECP and Old Mutual, respectively). - Operational model: - Major PABs conduct cross-border operations mostly as subsidiaries, often with centralized business lines and shared group frameworks for risk, internal audit, IT platforms, and centralized treasury (e.g., Ecobank’s treasury centralized in Paris). - Personnel rotation and training at headquarters are used to disseminate group knowledge. - Regional operational nuances: - In the WAEMU region, some banks operate branches within other WAEMU countries out of a subsidiary in one WAEMU country; branch requirements in these cases are based on a different formula than for subsidiaries. *Source: Box 4, “IMF Technical Assistance on Banking Supervision and Regulation to Sub-Saharan Africa,” from the provided IMF content unit.* ### Box 5. Pan-African Banks’ Complex Ownership and Corporate Structure—Example of Bank of ### Box 5. Pan-African Banks’ Complex Ownership and Corporate Structure—Example of Bank of Africa ### Ownership and corporate structure (Bank of Africa example) - BOA group’s subsidiaries in each country have very complex shareholding structures; subsidiaries and group subholdings are interlinked through cross-holdings. - Complex structures tend to make it more difficult for supervisors to have a clear consolidated view of financial groups. - Banque Marocaine du Commerce Extérieur/Bank of Africa Ownership Structure, as of end-2013: - Figure indicates shareholding categories: less than 25%; more than 25% and less than 50%; more than 50% and less than 75%; more than 75%. - The figure does not include any outside shareholders. ### Intragroup integration and centralized group services (Box 6) - Centralized activities commonly include IT services and treasury functions; back-office operations may be located in one country servicing the entire group with backups in other locations. - Centralized internal control or risk management may be overseen at the group level with common and standardized manuals. - Benefits: - Economies of scale for cross-border banking. - Risks and supervisory concerns: - Operational risks from sensitive information kept offshore, possible unauthorized access, and lack of accessibility when necessary. - Resolution complications if subsidiary functionality depends too much on the parent or groupwide services. - Potential circumvention of restrictions on dividend or capital transfers via fees charged for centralized services. - Supervisory responses: - Supervisors audit and check centralized systems carefully, including backup locations. - Some supervisors request banks to keep information and IT infrastructure within the country. - Supervisors scrutinize transfer prices more closely, including with the help of consultants, and have put bans on fees that cannot be explained by the value added by the services rendered. ### Balance sheet expansion (2007–13) - Consolidated analysis shows three major PABs (Ecobank, BMCE, and Attijariwafa) expanded their assets strongly since 2007. - For foreign banking groups, only Standard Chartered showed strong asset growth at the consolidated level. - For the remaining banks, assets grew less than 10 percent during 2007–13, or even declined. - The African operations of large foreign banking groups often represent a small role in the global group (with a share of less than 5 percent of total assets), so consolidated group trends can be misleading for African operations. - Aggregated African operations data generally follow the consolidated data pattern except for Société Générale and Barclays. - Subsidiary-level patterns: - Pan-African banking groups show strong asset expansion across most subsidiaries—almost all subsidiaries of Ecobank show very high asset growth; Standard Bank and BMCE also show many subsidiaries with strong growth. - Asset growth seems smaller in economies where subsidiaries have a higher deposit share. - For Standard Bank, relatively low asset growth in its South African home market may explain muted consolidated growth despite stronger growth in other SSA operations. - Foreign banking group subsidiaries show smaller and more heterogeneous asset growth; e.g., Standard Chartered had strong growth in some subsidiaries but declines in others; almost half of Barclays’ subsidiaries saw decreasing assets; French banks’ subsidiaries’ asset growth was diverse but mainly subdued. - Loan growth pattern: - Mirrors asset growth: subsidiaries of PABs expanded loan books more strongly than those of foreign banking groups. - All PABs had strong expansion of their loan book from 2007 to 2013 across most subsidiaries. - Many foreign bank subsidiaries experienced subdued expansion or declines in loan books. ### Financial soundness (consolidated and subsidiary indicators, 2007–13) - Analysis uses loan-to-deposit ratios, return on average assets (ROAA), total capital ratio, and nonperforming loans (NPLs) for four PABs and four foreign banking groups where sufficient data are publicly available. - Consolidated findings: - The four PABs analyzed have higher profitability (ROAA) and lower loan-to-deposit ratios than the four foreign banking groups. - Foreign banking groups generally have loan-to-deposit ratios exceeding 100 percent (except Standard Chartered). - Pan-African banking groups exhibit loan-to-deposit ratios well below 100 percent; however, Attijariwafa’s loan-to-deposit ratio has been increasing in the last couple of years to above 100 percent. - Capital ratios and asset quality have not deteriorated markedly overall, but: - Ecobank’s capital ratio has been on a downward trend. - Ecobank’s NPL ratio has exhibited large swings since 2008. - Subsidiary-level data limitations: - Return on average assets and loan-to-deposit ratios are generally available for almost all subsidiaries. - Capital ratios and NPLs data have significant gaps; capital ratio data are available for a large number of subsidiaries primarily for Standard Bank and Barclays. - The full set of indicators over the entire period exists only for a small number of systemically important subsidiaries. - Erratic data movements in capital and NPL ratios may indicate problems with underlying data. - Available evidence on credit expansion and soundness: - Some subsidiaries experienced low profitability or losses, high and rising NPLs, and falling or highly variable capital ratios—often alongside high credit growth over the last five years, suggesting strong credit expansion at the expense of asset quality. - For Ecobank, this pattern is largely observed in smaller and relatively newly established subsidiaries. - For Barclays, several subsidiaries have low profitability and high NPLs despite subdued credit growth in recent years. - Loan-to-deposit ratios are generally below 100 percent for subsidiaries, and many subsidiaries are financed through local deposits—contrasting with pre-crisis Eastern and Central Europe, where parent bank funding exposed subsidiaries to reversals. ### Challenges for banking oversight and supervisory weaknesses - Rapid expansion of PABs creates supervisory challenges in light of key weaknesses in supervisory frameworks, including: 1. Licensing and ownership structure. 2. Differences in accounting and data standards. 3. Consolidated bank supervision. 4. Home-host issues including cross-border coordination and information sharing. - Basel Core Principles compliance: - Compliance with Basel Core Principles varies among African countries and is generally lower than in the rest of the world. - Compliance is particularly weak regarding the home-host relationships principle: only 50 percent of African countries are compliant or largely compliant with this principle compared to almost 75 percent in the rest of the world. - Out of the 16 African countries where an assessment has been undertaken, only Mozambique, South Africa, West African Economic and Monetary Union (WAEMU), and Zambia were compliant. - Specific supervisory challenges: - Supervisory capacity: understaffing, lack of expertise, and a growing gap between resources and mandate (including expansion in scope to cover microfinance). - Prudential regulation and enforcement: some jurisdictions have less demanding standards (e.g., WAEMU and Central African Economic and Monetary Community), weak enforcement, and slow progress in harmonizing regulatory standards and practices. - Licensing and ownership structure issues: - Licensing of new banks and cross-border operations does not always follow a structured, transparent approach conducive to effective supervision. - Some authorities allow foreign banks only as subsidiaries and limit branches; others have no clear stance. - Complicated cross-border structures and unregulated bank holding companies in some jurisdictions impede effective supervision and groupwide consolidated oversight. - Supervisors should understand PAB corporate structures and consider holding them to a higher standard when structures impede effective supervision, risk detection, or resolution (including assessing suitability of major shareholders and detecting hidden risk exposures). ### Accounting and data standards - Financial reports and disclosures of PABs are based on different sets of accounting standards, complicating comparative analysis and transparent disclosures. - While many African jurisdictions apply International Financial Reporting Standards, other countries lag behind. - Plans to implement International Financial Reporting Standards exist in some jurisdictions but progress has been slow. - Recommendation: accelerate plans to implement International Financial Reporting Standards where local standards do not provide a basis for fair and accurate measurement and transparent reporting. ### Organizational model trade-offs (Box 7: Subsidiaries versus Branches) - Cross-border banking groups face a trade-off between efficiency (scale and diversification) and financial stability concerns (cross-border contagion); no single model fits all. - Decentralized model—Subsidiaries: - Favored by global retail banks focusing on local clients and relying on local deposits; may be preferred by host authorities seeking to shield affiliates and facilitate local oversight and resolution. - From home authorities’ viewpoint, subsidiaries with strict firewalls may be preferred for expansion into weak economies. - For financial stability, subsidiaries may limit contagion but reputational factors can induce parent support. - Centralized model—Branches: - Favored by banks with significant wholesale operations for liquidity and credit risk management and funding cost reduction. - Home authorities may prefer branches to retain control over group capital and liquidity. - Host supervisors in countries with underdeveloped financial systems may prefer branches to provide credit services backed by parent strength. - Overall: differences between models are increasingly smaller; there are varying degrees of centralization and regulatory measures for branches (e.g., separate capitalization requirements). *Source: IMF content as provided in the supplied document excerpt.* ### Box 8. Overview of Governance Best Practices in Commercial Banks ### Box 8. Overview of Governance Best Practices in Commercial Banks ### Governance best practices (ownership, boards, management, systems) - Ownership (BCP 5) - "A transparent ownership structure with limited complex cross-ownership of subsidiaries enhances transparency." - "Supervisors need to have a clear view of ultimate ownership." - "Parent holding companies need to be regulated as banks." - Boards (BCP 5, 14, 26) - "There should be a majority of independent, nonexecutive members." - "There should be a core of members with sound background in banking and financial services." - "All board members should be subject to and pass fit-and-proper tests, including that they do not have unresolved defaults on past debts." - "The internal audit function should report to a board committee of independent members." - "Board members should have individual responsibility for oversight of the bank." - "Boards of subsidiaries should be clearly mandated and held responsible for oversight of subsidiary operations and soundness." - Management (BCP 15) - "Top management should be qualified and experienced in banking operations." - "Management should be subject to and pass fit-and-proper tests. Key managers should not have unresolved defaults on past debts." - "Appropriate internal risk management and assessment frameworks should be in place." - Accounting and Information Technology Systems (BCP 5, 22, 25 to 28) - "High-quality, secure, and reliable accounting and information technology systems should be in place." - "The accounting framework should comply with International Financial Reporting Standards." - "Accounts should be audited by reputable audit firms in conformity with international or national accounting standards and published. Auditors should be periodically changed to ensure objectivity." ### Consolidated supervision - Consolidated supervision is a major deficiency in some home countries of pan-African banking groups. - Examples and status: - "Some countries like South Africa and Morocco conduct supervision on a consolidated basis." - "Nigeria has recently commenced conducting consolidated supervision." - "In the WAEMU region, one of the obstacles for effective consolidated supervision is that while bank holdings, in principle, are subject to supervision according to the existing law, prudential regulations to make it effective are not in place." - Consolidated supervision encompasses: - "reporting, regulation (prudential norms and limits applied at the consolidated and solo basis), and supervisory techniques." - It is essential regardless of the legal form through which expansion is taking place (i.e., through subsidiaries or branches). - Benefits of consolidated supervision: - "Allows supervisors to develop a thorough understanding and analysis of the operations and capitalization of the group and the interactions between parent banks and subsidiaries." - "Important given that many PABs expand into jurisdictions where supervision frameworks may be considered as weak." - "Should include supervision of the provision of centralized group services ensuring they are not used for circumvention of restrictions." - "Performed consolidated assessment and monitoring would hedge to some extent the supervisory gaps that may be caused by the lack of proper information sharing and coordination mechanisms with host supervisors." - Example practice: - "Morocco has a formally articulated supervision policy for home banks with operations abroad. The Moroccan central bank quarterly monitors key prudential indicators, including solvency, provisioning, and profitability among others factors." ### Home-host issues and supervisory coordination - Rapid growth of PABs increases the importance of supervisory coordination and information sharing. - Progress to date: - "Supervisory authorities have started to strengthen their working relations and joint activities, and have established formal cooperation agreements and first supervisory colleges." - Shortcomings in exploitation of arrangements: - "While many African supervisors have established informal contacts or signed formal information sharing and cooperation agreements, in practice the flow of information seems not systematic and regular." - "In addition, it does not fully take into account the respective roles and responsibilities of concerned supervisors." - Joint inspections and activities have been limited so far.2 - Four likely reasons for limited interaction: - "Some supervisors are still struggling to achieve effective oversight over domestic banking operations, so cross-border issues may be beyond their capacity or institutional mandates." - "The expansion process has started recently and needs additional time to become a more structured exercise." - "The size of cross-border subsidiaries is still generally limited compared to the total group. Therefore, from a materiality point of view, home supervisors may not consider the process as a priority part of their framework." - "Effective cross-border supervision is a complicated skill; the limitations to which, if not constructed effectively, were demonstrated clearly during the global financial crisis." - Offsite vs onsite supervision: - "Home supervisory authorities rely to a major extent on offsite supervision and monitoring of cross-border subsidiaries and branches with limited onsite inspection and monitoring." - Recommendation: "Home supervisors should enhance the onsite framework when it comes to inspection of cross-border subsidiaries of pan-African banking groups, for example by using joint inspections to a stronger degree than currently." ### Supervisory colleges: status, benefits, and enhancements - Status: - "African home supervisors have established or are planning to establish supervisory colleges for the largest cross-border banking groups." - "Of the seven major PABs, three groups had a supervisory college recently and for three groups colleges are planned to be held by the end of the year." - "The Central Bank of Kenya has organized supervisory colleges for most of its PABs." - "The supervisory colleges were organized as general colleges involving all host supervisors of the concerned banks." - Benefits observed from initial meetings: - "Foster better relationships among supervisors, better understanding of the group strategy and its risk assessment, and sharing of subsidiary assessments by host supervisors." - Challenges: - "The time needed to organize the college meeting, the issues to be discussed at the meeting, and the decision-making capacity of the supervisory staff attending the meeting." - Recommendations to nurture colleges: - "Establish relationships that remain active in between college meetings through different means (e.g., teleconferences, videoconference, or emails)." - "Colleges should supplement and not replace bilateral forms of information sharing and cooperation." - Reconsider structure as colleges mature: - "One possible structure would be a core college including a few supervisors of key host countries, for example the primary risk-taking entities, and a universal college with a wider representation, particularly host supervisors where PABs are domestically systemic." - "The college structure should be periodically reviewed and membership criteria transparently communicated with host supervisors." - "Home supervisors should involve host supervisors not included in colleges via other methods of engagement, for example bilateral arrangements." - Functional enhancements for colleges: - "(1) circulating meeting agendas and materials well in advance of meetings to allow sufficient time for preparation and to determine the necessary level of representation;" - "(2) recording meeting summaries, recommendations, and action points, and following up on them;" - "(3) better preparation and coordination ahead of the college meetings to ensure that seniority of representatives, their knowledge of the groups, and their decision-making powers are commensurate with the importance of topics for discussion."3 ### Cross-Border Crisis Management and Resolution Issues - Current state: - "Very limited work has been done on establishing crisis management and resolution frameworks for these banks."4 - "Even in the countries with relatively better developed supervisory and regulatory frameworks, the issue of crisis preparedness and resolution planning of cross-border banks has not been tackled yet." - Legal and institutional challenges: - In some African countries and regional monetary unions, "relevant resolution powers are not always clear and are spread across regional and national bodies with possibly conflicting objectives and varying interests." - "In many/most countries, bank resolution is conducted via regular company insolvency law, which typically fails to deliver prompt and effective resolution in systemic cases." - Consequence: "The inability to act promptly can have an adverse impact on public confidence, as depositors lacking ready access to their funds can trigger contagion and runs on other banks." - Recommendations for national frameworks and powers: - "African supervisors should ensure that their national resolution frameworks provide them with adequate powers along with sufficient legal and operational capacity." - "Authorities should enact legislation in line with the Financial Stability Board’s Key Attributes of Effective Resolution Regimes, providing them with a range of resolution tools (including transfer and bridge bank powers) applicable at an early juncture." - "In countries or monetary zones where powers may be allocated between different national authorities or between regional and national authorities, cooperation and clear lines of responsibility and accountability would be essential to ensure an orderly and timely resolution of problem or failed banks." - Crisis Management Groups (CMGs) and recovery/resolution planning: - "African supervisors should establish crisis management groups (CMGs) for regionally and domestically systemic cross-border banks." - CMGs composition: "While supervisors form the backbone of CMGs, these may also include other stakeholders like central banks, ministries of finance, or deposit insurance corporations." - CMGs role: "Could play a pivotal role in developing and implementing institution-specific cooperation agreements between home and relevant host authorities (i.e., where cross-border subsidiaries are systemic to the banking group) on the main issues and steps that should be involved in planning and crisis resolution stages (Box 9)." - Example: "The South African authorities participate in two global CMGs, Barclays Africa Group Limited and Old Mutual Group (Nedbank) and could use their experience for establishing effective CMGs in sub-Saharan Africa."5 - Recovery and resolution plans: - "African supervisors should require regionally and domestically systemic cross-border banks to develop recovery and resolution plans." - "All banks should be required to prepare comprehensive financial contingency plans, updated annually, respecting proportionality criteria (small banks will have less complex contingency plans)." - "The home supervisor should lead the development of the resolution plan, relevant host supervisors should be actively engaged in the process." - "National and regional supervisors should require resolution plans from systemic banks, which in some cases may necessitate legal reforms including giving supervisors the power to require changes to group structures for making them more resolvable." - "Resolution plans should be revised and updated annually. This should not preclude the host resolution authorities from preparing their own resolution plans for subsidiaries of the banking groups in their jurisdictions." - Host authority discretion and ring-fencing: - "Supervisory or national resolution authorities should have resolution powers with respect to the local structures of cross-border banks and should use these powers in coordination with home authorities." - "In cases where the home supervisory authority is not acting in the interest of the host jurisdiction and its financial stability, the host authority may take discretionary action, like ex post ring-fencing measures restricting intragroup transfers, but subject to prior notification and consultation with the home authorities."6 - Caveat: excessive ring-fencing can "present an unhelpful restriction on capital mobility" and could "destabilize a PAB facing stress." - Example: "In 2012, in the face of large increase in capital requirements mostly directed at nonlocal banks in some other countries, the Central Bank of Nigeria issued directives forbidding Nigerian banks from recapitalizing subsidiaries abroad. Subsequent consultations led to modification of the directives to allow for capitalization based on commercial needs on a nondiscriminatory basis." - Deposit insurance and financing of resolution: - "Only some African countries have deposit insurance schemes, which is a further challenge for resolving PABs." - Effective resolution requires "effective financing arrangements, for example an ex ante deposit insurance fund that can be used to back a transfer of retail depositors to another bank in a resolution." - Design challenges: - "The coverage range of the deposit insurance scheme, and whether it only includes banks and their activity within the jurisdiction or also includes their branches and/or subsidiaries overseas." - "The hierarchy of creditors and how to treat different types of claims that may exist across borders." - Recommendations: - "Depositor preference which does not discriminate by location or nationality of depositor, and deposit insurance schemes with coverage provided by the jurisdiction—home or host—that collects the premiums for an ex ante fund, would go a long way toward alleviating these challenges." - "The use of deposit insurance funds, in accordance with the revised International Association of Deposit Insurers/Basel Committee on Banking Supervision Core Principles for Effective Deposit Insurance Systems, should not be diverted to support ailing banks to keep them open, or for any other government support." ### Box 9. Crisis Management Groups and Resolution Plans — key components - CMG functions and possible contents: - "the roles and responsibilities of the authorities in the precrisis stage as well as during the crisis;" - "information sharing process and details before and during the crisis;" - "information sharing and consultation procedures among home and host supervisory authorities in case of adverse developments at the level of the parent bank and/or its affiliates;" - "joint work and regular consultations to assess the robustness of a cross-border bank resolution plan and strategy;" - "procedures for protection of confidential or sensitive information." - Resolution plans should include, inter alia: - "detailed information regarding the bank’s various business lines to substantive legal entities along with a breakdown of its corporate organization;" - "a complete explanation of the ownership structure, along with a full accounting of the assets, liabilities, and contractual obligations of the company;" - "an explanation of where critical functions—such as information technology or treasury functions—are conducted: how will the subsidiaries operate in resolution if these functions are housed in entities in other jurisdictions;" - "data on credit and other exposures, major sources of funding, capital situation, and cash flows, along with identification of foreign countries in which it operates, are particularly important." *INTERNATIONAL MONETARY FUND* ### Box 10. Lessons From the Global Financial Crisis for Cross-Border Supervision and Resolution ### Box 10. Lessons From the Global Financial Crisis for Cross-Border Supervision and Resolution of Pan-African Banks ### Key lessons from the global financial crisis (case evidence and implications) - Absent effective cooperation and planning of cross-border bank resolution, tools utilized to resolve cross-border institutions tend to be last-minute ad hoc interventions involving public support. - Fortis Group (2008): required government interventions by both home and host authorities; resolution was domestically focused and based on national frameworks and responsibilities. Longstanding relationships among closely integrated neighbors (Dutch and Belgian supervisory authorities) broke down in crisis due to differences in the assessment of available information and the perceived sense of urgency; limited legal resolution powers delayed the resolution process. - Lehman Brothers (2008): group consisted of 2,985 legal entities operating in more than 50 countries with an ultimate holding company monitored by the U.S. Securities and Exchange Commission; the holding company and several major subsidiaries filed for bankruptcy protection. Short-term liquidity needs of large complex groups in crisis times may result in different reactions by home/host supervisors that could lead to disorderly bankruptcy and disruptions to key systems and services. - Effective cross-border bank resolution requires: - orderly resolution plans; - an understanding by regulators of the cross-border banking group structure, the interdependencies thereof and the implications for going as well as gone concern purposes; - an understanding of insolvency regimes in different home/host jurisdictions since these would usually govern the resolution of various components of a cross-border banking group. ### International and regional responses reflected in recommendations - Lessons reflected in recommendations by the Vienna Initiative (launched in 2009; reinvigorated as Vienna 2.0 toward the end of 2011) to enhance bank resolution and supervisory practices. - Vienna 2.0 aim: safeguard the financial stability of emerging Europe and ensure home countries of European banks coordinate more closely with host countries to better take account of potential systemic risks in host countries. ### Roles of regional institutions and practical arrangements - West African Economic and Monetary Union (WAEMU): - Responsibility for supervision is shared between regional and national authorities with the Banking Commission (BC) at the center. - Banks and microfinance institutions with more than CFAF2 billion in deposits or loans are supervised by the BC; smaller microfinance institutions are supervised by national authorities. - A Financial Stability Committee is responsible for macroprudential supervision and to guarantee the stability of the financial system at the regional level. - Bank licenses issued by the national minister of finance after a binding opinion by the BC; licenses revoked by the national minister of finance upon decision of the BC; domestic minister of finance has right to appeal at the WAEMU Council of Ministers. - Bank holding companies are not formally regulated; Ecobank Transnational Incorporated is partially supervised by the BC on a voluntary basis as confirmed by a WAEMU council minister’s decision of 1991. - Issues highlighted: allocation of resolution responsibilities, lender of last resort role, fiscal authority responsibility, risk of financial support turning into sovereign default, and the role of lender of last resort in foreign currency (central bank may need to seek swap arrangements). - East Africa Community (EAC): - Cross-border cooperation is part of broader EAC agenda on bank regulation and supervision; Article 85 of the EAC Treaty envisages the development and integration of financial markets and associated legal and regulatory frameworks as prelude to the long-term goal of establishing the East African Monetary Union. The monetary union protocol was signed on November 30, 2013. - Cooperation covers banking, capital markets, insurance, and pension sectors. - Institutional steps taken: - Monetary Affairs Committee (formed in 1997) to speed up regional supervisory cooperation; meetings attended by central bank governors and supervisory representatives. - Multilateral memorandum of understanding (MOU) signed in 2008 to accelerate cooperation in banks’ consolidated supervision; facilitates collaboration in supervision and information sharing; has enabled joint onsite examinations and training. The MOU does not address crisis management issues. - Southern African Development Community (SADC): - Protocol on Finance and Investment encourages harmonized standards of practice and regulations. - Two coordinating fora: Committee on Central Bank Governors and SADC Subcommittee on Banking Supervisors. - Progress on harmonizing regulatory standards hampered by different stages of development, adherence to international good practices, and differences in legislative and institutional models. - Development of a common settlement system: SADC Integrated Regional Electronic Settlement System (SIRESS), launched in July 2013; as of end-March 2014, 22 financial institutions from within the common monetary area participated, including four central banks; additional non–common monetary area SADC countries were approved to join in September 2013. Malawi, Tanzania, and Zimbabwe opted to join during the first half of 2014; Democratic Republic of Congo, Mauritius, and Zambia joined during the second half of 2014, bringing the number of SADC countries in the system up to 10. Including participants from these additional countries, the number of participants on SIRESS increased to 62. - SIRESS details (Box 11 summary): - Purpose: electronic payment settlement system to settle regional transactions among banks within SADC on a gross basis and in real-time; replace correspondent banking arrangements for regional cross-border settlement. - Led by the South African Reserve Bank (SARB) in collaboration with the SADC Bankers Association; hosted and operated by SARB. - Initial participants: four rand common monetary area (CMA) countries (Lesotho, Namibia, South Africa, Swaziland). - Settlement currency currently South African rand; participant settlement accounts must be prefunded (system does not provide loans or overdrafts). - Membership open to any financial institution within SADC meeting access criteria and approved by its home central bank. As of end-March 2014, 22 CMA financial institutions participated; after expansion, 10 SADC countries participate and total participants increased to 62. - West African Monetary Zone: - Plans for monetary union complemented by efforts to enhance supervisory cooperation and harmonize supervisory processes. - College of Supervisors of the West African Monetary Zone formed in 2010 to enhance supervisory cooperation, harmonize processes, build capacity, deepen information sharing, and strengthen financial stability. - Activities focus on joint examinations of banks with cross-border subsidiaries, publication of an annual financial stability report, harmonization of supervision through regular peer reviews, and building cooperation with other central banks through MOUs. - Plans for bank resolution are being developed, with the Central Bank of Nigeria acting as chair. ### Authorities’ views and priorities (feedback and next steps) - Authorities saw the initiative as timely and important for addressing issues arising as the African economy opens up and becomes more integrated; pan-African banks improve competition and foster financial innovation but pose challenges requiring strong banks and strong regulators. - Authorities strongly supported the study’s findings and recommendations, noting progress in several areas partly due to recent Financial Sector Assessment Programs. - National actions underway include: closing gaps on bank holding companies’ regulation, raising accounting standards, creating cross-border supervisory colleges, signing MOUs, and exchanging information. - Gaps and needs identified by authorities: - Completion of financial infrastructure and promotion of financial inclusion, including deposit insurance, credit rating agencies and credit information systems, dispute resolution mechanisms, efficient payments and settlements systems, and consumer protection mechanisms—these are not in place in all sub-Saharan Africa countries. - Risks from very uneven supervisory capacity and weak oversight capacity in some jurisdictions; importance of harmonization of standards emphasized. - Supervisory colleges: progress and peer-to-peer lessons via cross-border supervisory colleges and joint supervision missions; critical that most senior decision-making officials participate. - While no pan-African banks are classified as global systemically important banks, several institutions are regionally systemic; some authorities suggested applying the systematically important financial institution framework to them (for instance regarding the leverage ratio). - Need for more emphasis on stress testing, particularly top-down macro models with a cross-border component, and investigation of ring-fencing practices introduced by national authorities. - Biggest need: further progress on resolution. Existing MOUs on cross-border banks discuss supervisory issues but are silent on crisis management and resolution. It is not advisable to wait until a crisis occurs to get a resolution framework in place; agreements are needed that clearly delineate home-host responsibilities in crises. - Looking forward: - Authorities underscored the important role IMF technical assistance will continue to play in enhancing domestic supervisory capacity, ensuring financial stability, and developing frameworks for handling cross-border issues. - Capacity development in supervision and financial sector oversight generally considered critical, including frameworks to facilitate peer review of stress tests. - A useful next step: work on macroprudential and financial stability aspects of pan-African banking and how this could be coordinated, including through better data sharing. - Considerable support for the idea of a pan-African bank supervisory oversight committee, a coordinating committee of home supervisors, to drive the reform agenda in Africa. *International Monetary Fund* ### Conclusions and Recommendations ### Conclusions and Recommendations ### Major findings on Pan‑African Banks (PABs) - PABs are driving financial integration, inclusion, innovation, and competition across Africa, filling a void left by withdrawal/decline of traditional players. - Political and macroeconomic improvements and robust economic growth have facilitated rapid change in African finance. - PABs based in Morocco, South Africa, and to a degree Kenya and Nigeria are inducing host authorities to upgrade supervisory and accounting norms. - PABs are systemically important in a number of countries and pose new regulatory and supervisory challenges that, if unaddressed, could raise systemic risks. - A key urgent gap: lack of formal regulatory oversight of bank holding companies in the West African Economic and Monetary Union (WAEMU) and absence of consolidated supervision there. - PAB expansion likely increases the strength of spillovers across African countries; greater asymmetry in economic size between home and host increases the likelihood overall institutional strategy will not account for host country, raising host financial stability risks. - Cross‑border resolution preparedness is limited; without resolution mechanisms, supervision alone may have limited effectiveness. - Buffers beyond core capital available for bail‑in for many PABs are “at the moment much lower,” increasing likely fiscal implications of failures. ### Systemic risk and cross‑border issues - Consolidated supervision and cross‑border cooperation are key to getting a full picture of the bank. - Host authorities face risks when home authorities or parent institutions take unilateral or uncoordinated actions. - Resolving a holding company with operations in many countries would require early agreement on fiscal burden sharing, backstopping, and creditor hierarchies. - Ring‑fencing by some countries does not obviate the need for cross‑border collaboration. - National fiscal authorities will likely have domestic interests unless there is a robust precommitment to a cost‑sharing formula for public support. ### Recommendations (policy and supervisory) - Licensing: - Ensure banks permitted to operate are sound, have good governance, and business models that aid financial development. - Precondition: a bilateral memorandum of understanding that includes intensive collaboration, comprehensive information sharing with home supervisors, and assurance on bank soundness from home supervisors. - Governance and ownership structure: - Thorough supervisory oversight for PABs with complicated structures to ensure ultimate beneficiaries are known. - Supervisors should review fit‑and‑proper oversight of bank management and take urgent action on deficiencies. - Supervisors should closely examine cross‑border intra‑bank transactions and request more transparent structures if needed. - Host supervisors must review structures affecting subsidiaries and use corrective/enforcement powers during licensing and thereafter. - Data and transparency: - Identify data requirements and ensure adequate and timely exchange both upstream and downstream. - If adequate data provision cannot be ensured at licensing or reporting is obstructed, home supervisors should take corrective actions. - Share information between supervisors and authorities responsible for macroprudential and financial stability and the central bank. - Consolidated supervision: - Implementation of consolidated supervision for all PABs, particularly major PABs, should be a high priority and accelerated. - Consolidated supervision by home authorities should cover centralized group services and prevent circumvention of restrictions (e.g., on capital transfers or dividends). - Harmonization: - Lagging countries should intensify efforts to harmonize prudential regimes with international standards and prioritize legal reforms enabling effective supervision and crisis management. - Phased introduction of Basel II/III standards in lagging countries is recommended as part of comprehensive reform. - Adoption of International Financial Reporting Standards accounting standards should be accelerated. - Joint inspections: - Maximize information through joint inspections with home country participation in host locations. - Consider bespoke supervision (a single supervisory team across multiple agencies) where appropriate. - Supervisory colleges: - Home authorities should establish supervisory colleges for all systemic PABs, meeting at senior level at least once a year. - Organize colleges to focus on core risks and enhance supervisors’ representation for better implementation of decisions. - Consider a two‑tiered structure (core and universal branches) for large and geographically widespread groups. - Resolution preparation: - Establish clear understandings across jurisdictions of responsibilities in line with the Financial Stability Board’s Key Attributes, including convergence on creditor hierarchies and enforcement of resolution measures. - Review legal frameworks to ensure powers to intervene and force resolution (special resolution regimes). - Consider strategies to minimize public sector costs, including prefunded depositor protection. - Establish recovery and resolution plans for systemically important PABs; require each PAB to have a crisis management group and provide a “living will.” - Include finance ministries in discussions given fiscal implications of bank failures. - Regional integration: - Lessons from Europe: common currency with free capital movement may require a common supervisor and resolution mechanism. - East Africa Community and WAEMU may consider stronger common supervision/resolution mechanisms over time (WAEMU has a common supervisor but no special resolution mechanism). - Where single agencies are not feasible in the short term, enhance intraregional cooperation across regulatory and supervisory issues and involve finance ministries. - Pan‑African financial stability: - Consider establishing a PAB supervisory oversight committee with regulators/supervisors and central banks from Kenya, Morocco, Nigeria, South Africa, and the WAEMU as initial members to drive cooperation and harmonization. - Periodically assess vulnerabilities from spillovers, including through stress tests; regional groupings should review national exercises and conduct multiregional exercises for PABs. - Home supervisors and the oversight committee could consider subjecting PABs with domestic or regional systemic importance to domestic systemically important bank requirements and account for regional dimensions. - Competition, financial inclusion, and consumer protection: - Address code‑of‑conduct issues and collaborate across borders on these matters. - Ensure consultation at the national level between supervisors, financial stability authorities, and the central bank. ### Surveillance and Technical Assistance - PAB emergence affects financial stability at national, regional, and continental levels; national authorities must assess national vulnerabilities and spillovers through financial linkages. - First‑best solutions (common supervision and common backstopping) are unlikely in the short term; regional bodies must adapt to better oversee PAB activities and improve coordination among regional and national supervisors. - IMF implications: - National Article IV consultations will discuss PAB developments in home and host countries. - The integrated surveillance decision provides a basis for bilateral surveillance to focus on spillover issues and regional implications of PAB activities. - National Financial Sector Assessment Programs would include PAB‑related issues; regional surveillance (e.g., WAEMU) will likely emphasize these banks. - Consider deepening macro‑financial stability analysis through a regional/thematic Financial Sector Assessment Program focusing on PABs. - Capacity building: - Many recommendations will require strengthened supervisory capacity; PAB home authorities are likely to lead capacity building, including including host supervisors in training, joint inspections, and colleges. - Staff exchanges and peer learning with supervisors from jurisdictions facing similar challenges are suggested. - PAB shareholders from countries with advanced regulation may provide implicit or explicit support for national supervisors’ upgrades. - The IMF, multilaterals, and national technical assistance providers should prioritize a comprehensive program to enhance supervisory capacity to handle PABs, including country‑specific recommendations, financial stability monitoring advice, and governance/institutional implications for deeper regional integration. ### Note on systemic thresholds and data availability (from source notes) - Subsidiaries/branches are defined as systemically important if deposits are larger than 10 percent of banking system deposits or if assets are larger than 7 percent of GDP. - Data availability categories (for 2012 or 2013 data): Group 1, Group 2, Group 3, Group 4 (with specific definitions provided in source notes). *Source: Conclusions and Recommendations, _afr1503 - Conclusions and Recommendations_* ### Appendix Table 2. Selected Pan-African Banks: Share of Deposits by Country, 2013 ### Appendix Table 2. Selected Pan-African Banks: Share of Deposits by Country, 2013 ### Overview - Table presents deposit shares (Percent) by country for selected Pan-African banks, with data as of 2013 if available or of 2012. - Legend codes in the table: - x Deposits share of total is greater than or equal to 10%. - x Deposits share of total is greater than or equal to 5% and less than 10%. - x Deposits share of total is less than 5%. - x Deposits data is not available. - x Representative office or investment bank branch. - Notes in the source: - "Deposits data is as of 2013 if available or of 2012. Italicized numbers indicate data is from Spring 2012 Regional Economic Outlook or from Bankscope for 2011 or older. Subsidiaries/branches are defined as systemically important if deposits are larger than 10% of banking system deposits or if assets are larger than 7% of GDP. BMCE = Banque Marocaine du Commerce Extérieur; BSIC = Banque Sahelo-Saharienne pour l'investissement et Commerce; CEMAC = Central African Economic and Monetary Community; GBCP = Groupe Banque Centrale Populaire; IB = investment bank branch; RO = representative office; WAEMU = West African Economic and Monetary Union." ### Deposits share patterns (selected excerpts as presented) - Rand Area / South Africa: entries shown include sequences such as "2522208RORORORO" (table entries as presented in source). - Lesotho: "52 8 20" (table entries as presented in source). - Namibia: "1923616" (table entries as presented in source). - Swaziland: "321615" - Angola: "1ROROx22 13" (table entries as presented in source). - Botswana: "1624 95" - Burundi: "35 3x7" - Democratic Republic of Congo: "41082441" - Ghana: "6 2231340 12" - Kenya: "5 RORO30113 95455 21" - Madagascar: "28 043" - Mauritius: "167 5 4524" - Mozambique: "1834031" - Nigeria: multiple entries concatenated including "3IB 128 17 8713 2 5 3 7" - Rwanda: "258x 1212" - United Republic of Tanzania: "50201x211211" - Uganda: "17 323x3360x212" - Zambia: "13 4012x2" (Above lines reproduce deposit-share cells as they appear in the source table for selected countries and banks.) ### Regional groupings and other country entries (as presented) - CEMAC region entries include lines such as: - Cameroon: "15 5 13 2 20 6" - Central African Republic: "x772 29" - Chad: "80x 37 289" - Congo: "18 x1 10 56RO" - Equatorial Guinea: "0 2730 x" - Gabon: "16 27660" - WAEMU region entries include lines such as: - Benin: "x31 78 113019 8 3" - Burkina Faso: "x163 12 3422x" - Côte d'Ivoire: "RO 10611 10x1 11 31x" - Mali: "17 24 14 30113x" - Niger: "x 22 401 19 x" - Senegal: "24 4 33xx013x" - Togo: "6x4xxx2414" - Other fixed exchange rate regimes: - Cape Verde: "0 2 x" - Sao Tome and Principe: "43 5 5 3" - Zimbabwe: "10328" - South Sudan: "x 318xx" ### Aggregate counts and systemically important operations (as presented) - Total Number of Operations (row as presented): 201192121998755542654433212635119105544222 - Total Number of Subsidiaries/Branches (row as presented): 1887212199775454265443321263311995543222 - Number of Systemically Important Operations (row as presented): 104427221011000200100000172321011111 ### Sources and ancillary labels (as presented) - Sources: Annual reports; Bankscope; and bank websites. - Additional label present in table: "GBCP 1810" appears in the table footnotes and layout. *Sources: Annual reports; Bankscope; and bank websites. Notes: Deposits data is as of 2013 if available or of 2012. Italicized numbers indicate data is from Spring 2012 Regional Economic Outlook or from Bankscope for 2011 or older. Subsidiaries/branches are defined as systemically important if deposits are larger than 10% of banking system deposits or if assets are larger than 7% of GDP. BMCE = Banque Marocaine du Commerce Extérieur; BSIC = Banque Sahelo-Saharienne pour l'investissement et Commerce; CEMAC = Central African Economic and Monetary Community; GBCP = Groupe Banque Centrale Populaire; IB = investment bank branch; RO = representative office; WAEMU = West African Economic and Monetary Union.* ### Appendix Table 8. Selected Pan-African Banks and Foreign Banks: Subsidiaries’ Financial Indicators, 2007–13 ### Appendix Table 8. Selected Pan-African Banks and Foreign Banks: Subsidiaries’ Financial Indicators, 2007–13 ### Consolidated indicators (selected banks) - Standard Bank (Consolidated) - Loan-to-Deposit Ratio: 93.8, 92.1, 92.1, 85.6, 88.4, 88.1, 86.8 (2007–2013) - Return on Assets: 1.5, 1.2, 0.9, 1.0, 1.1, 1.3, 1.2 (2007–2013) - Total Capital Ratio: 11.6, 13.3, 15.1, 15.3, 14.3, 12.8, 15.1 (2007–2013) - Nonperforming Loans: 1.8, 4.1, 7.9, 7.1, 5.0, 4.6, 4.0 (2007–2013) - Standard Chartered (Consolidated) - Loan-to-Deposit Ratio: 85.8, 73.0, 77.2, 75.9, 75.2, 72.6, 74.4 (2007–2013) - Return on Assets: 1.0, 0.9, 0.8, 0.9, 0.9, 0.8, 0.6 (2007–2013) - Total Capital Ratio: 15.2, 15.6, 16.5, 16.5, 18.4, 17.6, 17.4 (2007–2013) - Nonperforming Loans: 1.4, 1.7, 1.7, 1.7, 1.6, 2.0, 2.3 (2007–2013) - Barclays (Consolidated) - Loan-to-Deposit Ratio: 117.1, 137.6, 130.3, 123.8, 118.0, 110.0, 100.0 (2007–2013) - Return on Assets: 0.6, 0.5, 0.3, 0.6, 0.3, 0.3, 0.0 (2007–2013) - Total Capital Ratio: 12.1, 13.6, 16.6, 16.6, 16.4, 17.1, 19.9 (2007–2013) - Nonperforming Loans: 2.8, 3.4, 5.2, 9.1, 6.7, 5.7, 5.8 (2007–2013) - Société Générale (Consolidated) - Loan-to-Deposit Ratio: 131.4, 143.6, 131.3, 124.9, 132.3, 116.8, 106.9 (2007–2013) - Return on Assets: 0.2, 0.3, 0.1, 0.4, 0.2, 0.1, 0.2 (2007–2013) - Total Capital Ratio: 8.9, 11.2, 13.0, 12.1, 11.9, 12.7, 14.7 (2007–2013) - Nonperforming Loans: 3.5, 3.8, 6.3, 6.6, 6.9, 7.2, 7.7 (2007–2013) - BNP Paribas (Consolidated) - Loan-to-Deposit Ratio: 128.4, 119.4, 120.5, 121, 127, 118.0, 61 (2007–2013) - Return on Assets: 0.2, 0.3, 0.5, 0.3, 0.5, 0.3, 0.4 (2007–2013) - Total Capital Ratio: 10.0, 11.1, 14.2, 14.2, 14.7, 14.0, 15.5 (2007–2013) - Nonperforming Loans: 4.0, 3.7, 5.7, 6.1, 6.6, 6.3, 7.1 (2007–2013) ### Selected subsidiary highlights (examples from table) - Standard Bank — Nigeria subsidiary - Loan-to-Deposit Ratio: 133.2, 100.9, 96.2, 88.3, 74.1, 69.1 (2007–2013) - Return on Assets: n.a., 4.3, 3.1, 4.2, 0.7, 0.9, 1.5 (2007–2013) - Total Capital Ratio: n.a., 41.5, 36.8, 32.6, 17.7, 17.3, 18.3 (2007–2013) - Nonperforming Loans: n.a. entries for some years; 6.2, 5.1, 4.4 in listed years - Standard Chartered — Mauritius subsidiary - Loan-to-Deposit Ratio: 302.0, 245.0, 114.7, 122.2, 129.7, 172.0, 105.6 (2007–2013) - Return on Assets: 0.9, 1.0, 0.8, 1.0, 0.8, 0.8, n.a. (2007–2013) - Total Capital Ratio: n.a., 17.1, n.a., n.a., n.a., n.a., n.a. (2007–2013) - Nonperforming Loans: n.a. for most years - Barclays — Kenya subsidiary - Loan-to-Deposit Ratio: 99.7, 85.5, 74.3, 70.4, 79.8, 75.6, 78.3 (2007–2013) - Return on Assets: 3.6, 3.4, 3.4, 2.4, 2.0, 3.8, 4.5 (2007–2013) - Total Capital Ratio: 14.0, 16.6, 23.8, 31.2, 24.7, 25.0, 17.3 (2007–2013) - Nonperforming Loans: 4.9, 5.0, 6.0, 6.4, 4.5, 3.3, 2.8 (2007–2013) - Société Générale — Côte d’Ivoire subsidiary - Loan-to-Deposit Ratio: 91.8, 82.7, 81.6, 85.3, 70.2, 65.5, 59.1 (2007–2013) - Return on Assets: 2.7, 3.0, 3.3, 3.2, 2.4, 2.2, 3.0 (2007–2013) - Total Capital Ratio: 1.6, n.a., n.a., n.a., n.a., n.a., n.a. (2007–2013) - Nonperforming Loans: n.a. entries for many years - BNP Paribas — Côte d’Ivoire subsidiary - Loan-to-Deposit Ratio: 76.7, 81.8, 78.6, 75.7, 68.7, 65.7, n.a. (2007–2013) - Return on Assets: n.a. entries for many years - Total Capital Ratio: n.a. entries for many years - Nonperforming Loans: 13, 12, 12, 23.5, 14.1, 15 (selected year entries present) (Note: many subsidiary entries contain "n.a." where data is not available.) ### Maps and geographic indicators (2013) - Appendix Figure 1: Maps of share of deposits by country, 2013 (deposit-share legend) - Categories shown: No presence; Deposits share above 10% of total; Deposits share between 5–10% of total; Deposits share less than 5% of total; Presence known but no data is available; Rep. Office or Inv. Bank Branch - Banks mapped: Standard Bank (South Africa), Nedbank (South Africa), United Bank for Africa (Nigeria), Guaranty Trust Bank (Nigeria), Attijariwafa Bank (Morocco), BMCE/Bank of Africa (Morocco), GBCP/Atlantic Financial Group (Morocco), Ecobank (Togo), Oragroup (Togo), Kenya Commercial Bank (Kenya) - Appendix Figure 2: Maps of assets in percent of GDP by country, 2013 (asset-in-GDP legend) - Categories and banks mirrored from Appendix Figure 1 - Note: GDP data is as of 2013; deposits data is as of 2013 if available or of 2012 ### Notes and data sources - Sources listed in table: Annual reports; Bankscope; and IMF staff calculations. - Note provided: Highlighted subsidiaries are systemically important subsidiaries, using both the deposit and the asset share criteria. BAGL = Barclays Africa Group Limited; BMCE = Banque Marocaine du Commerce Extérieur; n.a. = not applicable. *Sources: Annual reports; Bankscope; and IMF staff calculations.* ### Appendix II. Pan-African Banks’ Home Countries ### Appendix II. Pan-African Banks’ Home Countries ### Kenya - Sector characteristics: - "The Kenyan banking sector is more developed and capitalized than in other East Africa Community (EAC) countries." - Competitive advantage enabled Kenyan banks to "aggressively expand regionally" and "leverage their success, experience, and technology." - Innovations exported include "agency banking," enabling faster break-even for entrants such as Equity Bank and Kenya Commercial Bank (KCB). - Cross-border footprint: - "There are currently eleven Kenyan banks operating in the EAC member-states and South Sudan, operating through 288 branches." - First expansion into the EAC began in the late 1990s when KCB began operations in Tanzania. - Effects on host markets: - "EAC banks expanding in the region have lower spreads and are more efficient than other private domestic banks." - "Subsidiaries of these banks have lower spreads and overheads compared to subsidiaries of foreign banks from outside the EAC." - Kenyan banks are "highly profitable in their home markets, providing a comfortable buffer against losses and low profits in the first years of their subsidiaries’ operations." - Supervision and cooperation: - "The Central Bank of Kenya has hosted three supervisory colleges for KCB, Equity Bank, and Diamond Trust Bank, and plans to host three additional supervisory colleges by the end of 2014." - The Central Bank of Kenya has entered into memorandums of understanding (MOUs) with other banking regulators where Kenyan banks are present to "define and guide the working relationships between regulators, and ensure smooth exchange of supervisory information." ### Morocco - Sector characteristics and strategy: - "The Moroccan banking sector is among the most developed and stable on the continent," and is "home of some major African cross-border banks." - Moroccan banks export a business model emphasizing "development of small and medium-sized enterprises" and "high supervision standards" imposed by Bank Al-Maghrib (BAM). - Morocco's "privileged geostrategic position at the cross-roads of Europe, Africa, and the Arab world" aided international links and expansion. - Expansion drivers and geography: - Initial expansion centered in Guinea, Mali, and the Central African Republic; recent expansion mainly into "francophone West and Central African countries." - Drivers include "small impact from the global financial crisis," "challenging situations in neighboring Arab countries," and "limited domestic growth opportunities." - Phases of expansion: - Two phases: an "expansion phase" (mainly acquiring existing banks) and a "consolidation phase" (digest expansion, align systems and procedures, minimize risks). - BAM’s role and measures: - BAM requires banks to share "their three-year expansion strategies" and requires "prior authorization" for new international expansion. - BAM approves expansions based on "risk control–oriented culture and good governance" and considers "a set of country risks and individual banking group performance risks." - BAM is "constructing a risk matrix" including indicators on "size of the parent/subsidiary, contribution to the parent bank, profitability, asset quality, and market share in the host country." - BAM "incentivizes acquiring a majority stake in foreign banks" to allow parent control and nomination of key personnel. - BAM "tries to have an MOU signed once the subsidiary has been opened"; the MOU covers "prudential supervision, sharing of information, conduct of inspections, and training and capacity building," but "does not include provisions on banking resolution." - Morocco is "in the process of enacting a new central bank statute and new banking legislation" to strengthen BAM's supervision powers. - Coordination and supervision: - An "African Committee, consisting of BAM and the three largest banks," coordinates expansion and "prevent fierce international competition among domestic banks"; it meets "twice a year at the highest level" with "quarterly meetings at the technical level." - A "code of conduct has been signed by the three banks to prevent over competition and avoid presence in countries deemed too risky." - BAM "undertakes consolidated supervision of banking groups," has set up a "first meeting of a supervisory college for Attijariwafa," plans similar meetings for the other two large banks, conducts "regular conference calls with other supervisors," and "conducts joint inspection of subsidiaries." ### Nigeria - Expansion history and catalysts: - Cross-border expansion "started in 2002, but increased after the 2004 banking sector consolidation" when minimum capital requirements rose from "N2 billion (US$17 million) to N25 billion (US$210 million)." - By the end of 2008, "more than half of the 20 domestically owned Nigerian banks remaining had subsidiaries in at least one other African country, compared to only two in 2002." - United Bank for Africa had "subsidiaries in 18 African countries." - Expansion slowed during the global financial crisis in 2008–09 but resumed after stabilization and supervisory strengthening by the Central Bank of Nigeria (CBN). - Some banks failed due to poor initial risk frameworks and the crisis (example: Oceanic Bank, which had expanded to seven countries). - Drivers and geography: - Motivations included "increased availability of capital," trade finance opportunities, and leveraging "success, experience, and technology platform." - Expansion concentrated on neighboring countries and West African Monetary Zone (WAMZ) members (e.g., Ghana, Liberia, Sierra Leone), then into East Africa and francophone countries (e.g., Burkina Faso, Côte d’Ivoire, Democratic Republic of Congo). - Impact on host markets: - Nigerian banks "contributed 20 percent to the increase of branches in Ghana (from 595 to 640 during 2007 and 2008)." - Nigerian banks were responsible for "26 percent and 35 percent of branch growth in Sierra Leone and The Gambia, respectively." - Branch networks are "increasingly outside of the home countries’ capital cities" supporting financial access. - Nigerian banks are "systemic for most" WAMZ countries, necessitating deeper cooperation for financial stability. - Supervision and cooperation: - CBN implemented consolidated supervision and a "framework for cross-border supervision." - As a precondition for expansion, the existence of an MOU with the host country is required; "38 MOUs have been initiated and 15 signed so far." - A supervisory college for United Bank for Africa has been established. - The WAMZ college of supervisors is used for information sharing and capacity building; CBN conducts "joint home-host onsite bank examinations" with host supervisors in the WAMZ. ### South Africa - Sector characteristics and drivers: - "The South African banking sector is well-developed, and the biggest banks are sound and well-capitalized." - Push factors for expansion: "market saturation and sluggish growth at home." - Pull factors: "higher growth prospects in the rest of Africa" and increased pan-African trade concentrated in the Southern African region and manufactured goods sector. - Post-global financial crisis, SABGs refocused expansion to the African subcontinent, notably Standard Bank. - Industry structure and footprint: - Banking system dominated by "four universal banks and an investment bank": Standard Bank, First Rand, Nedbank, Absa (now part of Barclays Africa Group Limited), and Investec. - "The four largest banks accounted for approximately 75 percent of deposits in 2013." - South African banks have "operations in 17 other sub-Saharan African countries with a representative office or investment bank branch in another six countries." - Cross-border operations "only comprise about 6 percent of assets of the group total on average," a figure expected to grow. - Supervision and regulatory measures: - SARB required banks to submit new reports and plans, including "pan-African expansion strategies and recovery and resolution plans," and to conduct stress-tests ("capital adequacy and common scenario stress-tests"). - Banks must identify "which subsidiaries are material to the group" and "which subsidiaries are systemically important in the host country." - SARB recognizes varying maturity of cross-border supervisory relationships and the limited capacity of some host supervisors. - South Africa is "the only African country in the Basel Committee on Banking Supervision" and requires its banks and "all subsidiaries to comply with Basel III." - SARB addresses host supervisor capacity constraints by "holding training workshops" and conducting or planning "joint onsite inspections" (examples include antimoney laundering supervision for Standard Bank in Nigeria and Kenya). - Supervisory colleges and next steps: - In 2013, SARB "formed a supervisory college for Standard Bank and plans to form colleges for the other big banking groups." - The 2013 Standard Bank meeting included presentation of "strategy and risks" and regulator discussions; SARB described the process as "a step in the right direction" but "cumbersome to organize." - SARB's next steps include "adding crisis management on the agenda of supervisory colleges in 2015" and forming "a second college for Barclays Africa Group Limited." ### West African Economic and Monetary Union (WAEMU) - Integration and flows: - Banking is "still mainly conducted within national borders." - Cross-border flows to households or corporations "are largely in the form of syndicated loans involving a sister bank located in the country of the client." - Recent period: "Côte d’Ivoire and Senegal were net recipients of these flows, whereas most other countries were net exporters." - Cross-border banking flows remain relatively small, "at about 1.6 percent of total lending in 2012 (IMF 2013a)." - "The main cross-border financial flows in the WAEMU involve bank purchases of government paper." - Emergence of pan-African banks: - The region is "both host as well as home to some of the pan-African banks." - "Moroccan banks have expanded into the WAEMU region in recent years, and Togo is home to two major pan-African banking groups." - "European banks have remained engaged in the region." *Appendix II. Pan-African Banks’ Home Countries (INTERNATIONAL MONETARY FUND).* ### Appendix III. Selected Pan-African Banks ### Appendix III. Selected Pan-African Banks ### Kenya - Equity Bank - Founded in 1984 as Equity Building Society; transformed into microfinance and became a commercial bank in the 1990s. - Focus: small and medium-sized enterprises and innovative delivery channels such as mobile banking. - Cross-border expansion sequence: Uganda (acquisition of Uganda Microfinance Limited), South Sudan, Rwanda, Tanzania (established subsidiaries). - Rationale for expansion: trade, East Africa Community (EAC) integration, and diversification. - Cross-border subsidiaries account for around ten percent of group assets and 4.4 percent of group profits. - Kenya Commercial Bank (KCB) - Considered the largest and oldest East African bank; only Kenyan bank with subsidiaries in all EAC countries and South Sudan. - Listed in Dar es Salaam Stock Exchange (Tanzania), Uganda Securities Exchange, and Rwanda Over the Counter Market. - Began cross-border operations in 1997 (subsidiary in Tanzania); operates through 11 branches; set up a subsidiary in Burundi in 2012. - Cross-border strategy: new subsidiaries, primarily driven by following customers; headquarters in Kenya manages risk management, information technology, human resources, etc. - Cross-border operations concentrated in EAC countries and South Sudan with: - Assets: US$970 million (20 percent of group assets) - Loans: US$361 million (14 percent of group loans) - Deposits: US$795 million (22 percent of group deposits) - Profit contribution from cross-border subsidiaries: around US$27 million (16 percent of group profits) - Loan-to-deposit ratio: - Cross-border subsidiaries: 45 percent - Kenyan operations: 84 percent ### Morocco - Attijariwafa Bank - Established in 2004 by a merger; headquartered in Morocco. - Geographic focus: expanded since 2005 in Northern and Western Africa, only in French-speaking African countries. - International subsidiaries account for 24 percent of the bank's total branch network. - Overseas operations represent 24 percent of revenues and 17.6 percent of loans. - Subsidiaries include specialized finance companies (leasing, factoring, money transfer services, real estate, asset management, securities brokerage) and insurance activities. - Major shareholders: - SNI Group: 47 percent - MAMDA-MCMA Group: 8 percent - Wafa Assurance: 7 percent - Santander group: 5 percent - Banque Marocaine du Commerce Extérieur (BMCE) and Bank of Africa (BOA) - BMCE is Morocco’s second largest bank and main shareholder in BOA Group with a stake of 73 percent. - Major shareholders of BMCE: - FinanceCom Group: 38.8 percent - BFCM-Holding of CIC Group: 26.2 percent - CDG Group: 8.5 percent - MAMDA/MCMA: 5.1 percent - BMCE stakes: La Congolaise de Banque (25 percent) and Banque de Developpement du Mali (27.4 percent). - BOA history: first operation established in 1982 in Mali through private investors; African Financial Holding (now Bank of Africa Group) created to promote private banks and be principal shareholder while ensuring strong national capital representation. - BOA nonbank activities: leasing, real estate financing, brokerage and investment companies, insurance activities. - BOA Group ownership pattern: with few exceptions (Burundi, Madagascar, Niger, Tanzania), BOA Group, BOA subholdings, or other BOA banks are majority shareholders in individual BOA banks; national shareholders or international institutions constitute the remainder. - Groupe Banque Centrale Populaire (GBCP) - Integrates since 2010 the Popular Central Bank and 10 Regional People's banks; supervised by the Management Committee of the Popular Credit of Morocco. - Legal form: credit institution in the form of a limited company with a board of directors; quoted on the stock exchange since 2004. - Two principal missions: 1. Credit institution entitled to carry out all banking operations. 2. Central banking institution of the Regional People's banks: coordinates financial policy, ensures refinancing of Regional People's banks and management of their cash surpluses, and provides services of common interest. - Government holds 11 percent of share capital. - Regional People's banks: cooperative credit institutions operating in their respective districts. - Strategic partnership: signed in 2012 with Atlantic Financial Group to develop banking activities in seven countries of the West African Economic and Monetary Union. - GBCP manages strategic, financial, and operational management of subsidiaries under the name Atlantic Bank, run by Atlantic Business International (shareholders: GBCP and Atlantic Financial Group). - Atlantic Bank network: established progressively end of the 1980s; expansion accelerated in 2000s with creation in 2005 of Atlantic Financial Group holding controlling Atlantic Bank Group. ### Nigeria - Guaranty Trust Bank (GTBank) - Incorporated in 1990 as a limited liability company licensed to provide commercial and other banking services in Nigeria. - Began expansion beyond Nigeria in 2002 via acquisitions and greenfield startups. - Present in nine countries including subsidiaries in Anglo- and Francophone West Africa and East Africa. - Foreign operations share of assets in sub-Saharan Africa: 8.7 percent. - Activities: retail banking, loans and advances, equipment leasing, corporate finance, money market activities, foreign exchange operations. - Wholly owns Staff Investment Trust of Nigeria and Guaranty Trust Bank Finance BV (Netherlands) used to raise funds internationally. - Largest shareholder: Stanbic Nominees Nigeria Limited with a 22.3 percent stake; GTBank Global Depositary Receipts hold an 11.5 percent stake. - United Bank for Africa (UBA) - Origins: operated in Nigeria as British French Bank Limited in 1948; incorporated in 1961 as UBA; listed on Nigerian Stock Exchange in 1970 (first Nigerian bank IPO). - Mergers and acquisitions: - 2005: merged with Continental Trust Bank and Standard Trust Bank (which had a subsidiary in Ghana). - 2006: acquired Trade Bank (being liquidated by Central Bank of Nigeria). - International expansion: - 2007: UBA Cameroon formed. - 2008: expanded to Burkina Faso, Benin, Côte d’Ivoire, Liberia, Sierra Leone, Uganda. - 2010: expanded to Chad, Gabon, Guinea, Kenya, Senegal, Tanzania, Zambia. - 2011: expanded to Democratic Republic of Congo, Mozambique, Republic of Congo. - Current footprint: operates in 19 African countries, which account for about 20 percent of the group’s balance sheet. - Corporate structure changes: restructured from universal bank model to “Monoline Commercial Banking Model” following changes in Nigerian banking law; focus on corporate, commercial, consumer, international banking, trade services, cash management, and treasury services. - Wholly owned subsidiaries: UBA Retail Financial Services Limited and various nonbank subsidiaries (UBA Pensions Custodian Limited, UBA FX Mart Limited, UBA Capital Europe Limited, UBA Capital Holding Mauritius). - Shareholding structure is diverse; largest shareholder has 7.5 percent (UBA Staff Investment Trust Scheme). Other shareholders include: - UBA Staff Investment Trust Scheme: 7.5 percent - Consolidated Trust Funds: 4.7 percent - Hiers Holdings Limited: 4.1 percent - Custodian groupings for Stanbic Nominees Nigeria Limited: various holdings ### South Africa - Nedbank - Founded in 1888 in Amsterdam as Nederlandsche Bank en Credietvereeniging voor Zuid-Afrika; became Nederlandsche Bank voor Zuid-Afrika in 1951, later Netherlands Bank of South Africa. - Mergers during 1992 to 2002 led to holding company name change to Nedbank Group Limited in 2005. - Began expanding beyond South Africa in 1997–1998 with acquisitions in Lesotho, Malawi (Finance Corporation Malawi), and Swaziland (Standard Chartered Limited). - Increased stakes to majority shareholder in Commercial Bank of Namibia (Namibia) and MBCA Bank Limited (Zimbabwe) in 2002 and 2009, respectively. - Latest expansion: acquisition of 36.4 percent in Banco Unico. - Alliance with Ecobank Transnational Incorporated (ETI) since 2008; in October 2014 Nedbank became the largest shareholder of ETI with a 20 percent stake and a presence on ETI’s board of directors. - Foreign operations relative to South African operations: account for less than 3 percent of assets, deposits, and loans. - Wholly owns most subsidiaries organized under four entities: Nedbank Limited; BOE Investment Holdings Limited; Nedgroup Investments Holdings 101 Limited; Foreign Nedbank Group Subsidiaries. - Largest shareholder: Old Mutual Life Assurance Company Ltd with a 52.1 percent stake. - Other shareholders with stake greater than 5 percent: - Nedbank Group Treasury Shares: 9.9 percent - Public Investment Corporation of South Africa: 7.3 percent - Standard Bank - Established in 1862; largest African banking group by assets and earnings; holding company based in Johannesburg. - Major subsidiaries and segments: 1. Standard Bank of South Africa 2. Stanbic Africa Holdings, U.K. (hosts most African banking subsidiaries) 3. Liberty Holdings (insurance and investment arm) 4. International segment: Standard International Holdings (Luxembourg), Standard Bank Group International (Isle of Man), Standard Bank Offshore Group (Jersey) - Major shareholders: - Industrial and Commercial Bank of China: 25 percent - Public Investment Corporation: 15 percent - Tutuwa participants: 6 percent - Ownership by region: - Shareholders in Africa: 54 percent - China: 20 percent - United States: 14 percent ### Togo - Ecobank/ETI - Established in 1985 with financial help from the Economic Community of West African States; Citibank provided technical skills and ran Ecobank for first four years. - ETI is the parent holding company incorporated in Togo with status and privileges of a nonresident supranational financial institution. - Expansion: at least one new sub-Saharan African country every year since 1997; most extensive footprint in Africa with operations in about 36 African countries and a network of over 1,200 branches and offices. - In about 17 countries where it operates, Ecobank subsidiaries are of systemic importance. - Services: full-service bank offering wholesale, retail, investment, leasing, and microfinance products. - Major shareholders as of October 2014: - Nedbank: 20 percent - Qatar National Bank: 16.9 percent - Public Investment Corporation (South Africa): 13.9 percent - International Finance Corporation: 14.5 percent (direct [5.2 percent] and indirect [9.3 percent] ownership) - Ghanaian Social Security and National Insurance Trust: 4 percent - Alliance with Nedbank since 2008; Nedbank became largest shareholder of ETI in October 2014. - Oragroup - Bank holding company based in Lomé; predecessor Financial Group (Financial BC Genève) created in Geneva in 1985. - First operation opened in Benin in 1988 as Financial Bank Benin; early activities included banking, microfinance, and leasing. - Expansion: Chad (1992), Gabon (2002), Guinea (2002), Togo (2003). - 2008: Emerging Capital Partners (ECP) became a minority shareholder; 2009: ECP became sole owner and restructured Oragroup (divestiture of microfinance business). - 2009: expanded to Mauritania via minority stake in BACIM Bank. - 2012–2013: became majority shareholder in Banque Togolaise de Developpement and merged it with Orabank Togo in 2013. - Foreign operations are mostly majority or wholly owned; exception: Orabank Mauritania where Oragroup has a 34.4 percent stake and ECP a 62.6 percent stake. - Oragroup is majority owner of Banque Regionale de Solidarite Group (operates in all eight West African Economic and Monetary Union countries); operations rebranded as Orabank and operated as branches through Orabank Côte d’Ivoire except Benin and Togo (in process of merger with existing subsidiaries). - Shareholding (data as of November 2013): - ECP: 61.4 percent (majority shareholder) - Proparco: 10.2 percent - BIO: 5.6 percent - Deutsche Investitionsund Entwicklungsgesellschaft mbG: 3.3 percent - Banque Ouest Africaine de Developpement: 2.8 percent - Fonds Gabonais d’Investissements Strategiques: 2.6 percent - Remainder: other corporations and private shareholders *International Monetary Fund — Appendix III. Selected Pan-African Banks* ### References ### _afr1503 - References ### Cross-border banking and multinational bank behavior - Arena, Marco, Carmen Reinhart, and Francisco Vazquez. 2007. “The Lending Channel in Emerging Economies: Are Foreign Banks Different?” IMF Working Paper No. 07/48, Washington: International Monetary Fund. - Cerutti, Eugenio, Anna Ilyina, Yulia Makarova, and Christian Schmieder. 2010. “Bankers Without Borders? Implications of Ring-Fencing for European Cross-Border Banks,” IMF Working Paper No. 10/247, Washington: International Monetary Fund. - De Haas, Ralph, and Iman van Lelyveld. 2014. “Multinational Banks and the Global Financial Crisis: Weathering the Perfect Storm?” Journal of Money, Credit, and Banking 46 (1): 333–64. - Fiechter, Jonathan, Inci Ötker-Robe, Anna Ilyina, Michael Hsu, André Santos, and Jay Surti. 2011. “Subsidiaries or Branches: Does One Size Fit All?” IMF Staff Discussion Note 11/04, Washington: International Monetary Fund. - Kalemli-Ozcan, Sebnem, Elias Papaioannou, and Fabrizio Perri, 2013, “Global Banks and Crisis Transmission,” Journal of International Economics 89 (2): 495–510. - Popov, Alexander, and Gregory Udell. 2012. “Cross-Border Banking, Credit Access, and the Financial Crisis,” Journal of International Economics 87 (1): 147–61. - Lukonga, Inutu, and Kay Chung, 2010, “The Cross-Border Expansion of African LCFIs: Implications for Regional Financial Stability and Regulatory Reform,” IMF Research Paper, Washington: International Monetary Fund. - Viñals, Jose, and Jonathan Fiechter. 2010. “The Making of Good Supervision: Learning to Say ‘No,’” IMF Staff Position Note, SPN/10/08, Washington: International monetary Fund. ### Financial stability, spillovers, and regional outlooks (Sub-Saharan Africa and CESEE) - Drummond, Paulo, and Gustavo Ramirez. 2009. “Spillovers from the Rest of the World into Sub-Saharan African Countries,” IMF Working Paper No. 09/155, Washington: International Monetary Fund. - International Monetary Fund, 2012a, “The Impact of Global Financial Stress on Sub-Saharan African Banking Systems,” in Regional Economic Outlook: Sub-Saharan Africa. Washington, April. - International Monetary Fund, 2012b, “Nigeria and South Africa: Spillovers to the Rest of Sub-Saharan Africa,” in Regional Economic Outlook: Sub-Saharan Africa. Washington, October. - International Monetary Fund, 2013a, “West African Economic and Monetary Union (WAEMU), Staff Report on Common Policies for Member Countries, Supplement on Financial Depth and Macro-Stability,” IMF Country Report No. 13/92, Washington, April. - International Monetary Fund, 2013b, “Financing Future Growth: The Evolving Role of the Banking System in CESEE,” IMF European Department, Regional Economic Issues Paper, Washington. - International Monetary Fund, 2014b, “The Financing of Infrastructure in Sub-Saharan Africa: A Changing Landscape,” in Regional Economic Outlook: Sub-Saharan Africa Washington, October. - World Bank. 2013. “Financial System Stability Assessment: East African Community,” Washington. ### Regulation, resolution, and supervisory frameworks - Basel Committee on Banking Supervision. 2010. “Report and Recommendations of the Cross-border Bank Resolution Group,” Basel: Bank for International Settlements, March. - Basel Committee on Banking Supervision. 2012. “A Framework for Dealing with Domestic Systemically Important Banks,” Basel: Bank for International Settlements, October. - Basel Committee on Banking Supervision. 2013. “Global Systemically Important Banks: Updated Assessment Methodology and the Higher Loss Absorbency Requirement,” Basel: Bank for International Settlements, July. - Basel Committee on Banking Supervision. 2014. “Principles for Effective Supervisory Colleges,” Basel: Bank for International Settlements, June. - International Monetary Fund, 2014a, “Cross-Border Bank Resolution: Recent Developments,” IMF Policy Paper, Washington, June. - D’Hulster, Katia, and Inci Ötker-Robe. forthcoming. “Ring-fencing Cross-border Banks: An Effective Supervisory Response?” Journal of Banking Regulation. ### Access to banking, deposit insurance, and measurement of banking services - Beck, Thorsten, Asli Demirgüç-Kunt, and Maria Soledad Martinez Peria. 2007. “Reaching Out: Access to and Use of Banking Services across Countries.” Journal of Financial Economics 85 (1): 234–66. - Beck, Thorsten, Asli Demirgüç-Kunt, and Maria Soledad Martinez Peria. 2008. “Banking Services for Everyone? Barriers to Bank Access and Use around the World.” World Bank Economic Review 22 (3): 397–430. - Beck, Thorsten, Michael Fuchs, Dorothe Singer, and Makaio Witte. 2014. “Making Cross-Border Banking Work for Africa,” Eschborn, Germany: Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH. - Demirgüç-Kunt, Asli, Edward Kane, and Luc Laeven. 2014. “Deposit Insurance Database,” IMF Working Paper No. 14/118, Washington: International Monetary Fund. - Canuto, Otaviano, and Swati R. Ghosh. 2013. “Dealing with the Challenges of Macro Financial Linkages in Emerging Markets.” Economic Premise 129 (November). ### Data sources and surveys - World Bank, 2012, “New Bank Regulation and Supervision Survey,” database accessible at http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentMDK:20345037~pagePK:64214825~piPK:64214943~theSitePK:469382,00.html. *References list from _afr1503 - References* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/dp/2015/_afr1503.pdf_