Stress Testing in Sub-Saharan Africa: Practices, Communications, and Capacity Development
Departmental Papers, May 11, 2020
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- Stress Testing in Sub-Saharan Africa: Practices, Communications, and Capacity Development
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Bibliographic details
- Authors: Mindaugas Leika, Hector Perez-Saiz, Olga Ilinichna Stankova, Torsten Wezel
- Published: May 11, 2020
- Series: Departmental Papers
- DOI: https://doi.org/10.5089/9781513532912.087
Summary findings
- Supervisory stress tests are conducted in more than half of sub-Saharan African countries.
- Supervisory stress testing coverage is concentrated particularly in western and southern Africa.
- The number of individual stress tests has grown exponentially since the early 2010s.
- Few central banks publish assessments of macro-financial linkages.
- Central bank communications focus more on discussing trends and weaknesses within the financial sector than on outside risks that may negatively affect its performance.
Thematic coverage (subjects and keywords)
- Subjects: Banking; Commercial banks; Communications in revenue administration; Credit risk; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Financial sector stability; Revenue administration; Stress testing
- Keywords: Africa; asset concentration risk; bank; bank supervisor; banking risk; banking sector risk; Commercial banks; Communications in revenue administration; concentration risk; Credit risk; DP; DPPP; financial risk; Financial sector stability; Global; IMF TA; interest rate; liquidity risk; macro-financial risk analysis; macro-financial risk assessment; market; market risk; process; risk; risk analysis; risk driver; risk weight; stress test result; Stress testing; Sub-Saharan Africa
Key observations on practices and communications
- Practice: Supervisory stress testing is an established activity in a majority of countries in the region, with notable regional concentrations.
- Trend: A rapid, exponential increase in the number of individual stress tests since the early 2010s.
- Communication gap: Limited public disclosure by central banks of macro-financial linkage assessments.
- Emphasis in public communications: Greater attention to internal financial sector trends and weaknesses than to external or macro-financial risks that could impair financial sector performance.
Source: Departmental Paper No. 2020/007 — Stress Testing in Sub-Saharan Africa: Practices, Communications, and Capacity Development (May 11, 2020).