{
  "title": "Key Banking System Risks in the WAEMU: WAEMU",
  "publication": "Selected Issues Papers, May 17, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2024/05/16/key-banking-system-risks-in-the-waemu-548985",
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  "summary": "The gradual alignment of prudential regulations on Basel II/III standards since 2018, as well as improvements in banking supervision and macroprudential surveillance, have contributed to the WAEMU’s banking system’s resilience to recent global and regional shocks.",
  "sections": [
    {
      "heading": "Executive summary",
      "content": "- The gradual alignment of prudential regulations on Basel II/III standards since 2018, as well as improvements in banking supervision and macroprudential surveillance, have contributed to the WAEMU’s banking system’s resilience to recent global and regional shocks.\n- Cyclical vulnerabilities have been contained.\n- Bank credit portfolios remain highly concentrated.\n- Exposure to sovereign risks has grown substantially in recent years, together with liquidity risks.\n- Further reforms building on those recently implemented in line with recommendations from the 2022 Financial Sector Assessment Program (FSAP) will help address such vulnerabilities."
    },
    {
      "heading": "Key findings",
      "content": "- Regulatory alignment: Prudential regulations have been gradually aligned on Basel II/III standards since 2018.\n- Supervisory improvements: Banking supervision and macroprudential surveillance have improved, contributing to resilience against recent shocks.\n- Concentration risk: Bank credit portfolios remain highly concentrated.\n- Sovereign risk: Exposure to sovereign risks has grown substantially in recent years.\n- Liquidity risk: Liquidity risks have increased alongside sovereign exposure.\n- Cyclical position: Cyclical vulnerabilities have been contained."
    },
    {
      "heading": "Policy recommendations and reform priorities",
      "content": "- Build further reforms on those recently implemented in line with recommendations from the 2022 Financial Sector Assessment Program (FSAP).\n- Enhance macroprudential policy’s effectiveness.\n- Strengthen banking supervision frameworks."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject areas: Commercial banks; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Government securities; International organization; Macroprudential policy; Market risk; Monetary policy; Securities.\n- Keywords: bank credit portfolio; banking supervision framework; Banking System risk; banking system's resilience; banks; Commercial banks; credit gap; financial stability; Global; Government securities; Macroprudential policy; Market risk; risk; risks in the WAEMU; Securities; stress test; Sub-Saharan Africa; WAEMU.\n\nSelected Issues Paper No. 2024/014 — Pages: 30; Volume: 2024; Issue: 014; DOI: https://doi.org/10.5089/9798400275142.018; Stock No: SIPEA2024014; ISBN: 9798400275142; ISSN: 2958-7875\n\n---\n\n Content in this bundle\n\n- Key Banking System Risks in the WAEMU; Selected Issues Paper No. 2024/014; March 1, 2024\n  - Key Banking System Risks in the WAEMU; Selected Issues Paper No. 2024/014; March 1, 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Key Banking System Risks in the WAEMU; Selected Issues Paper No. 2024/014; March 1, 2024 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/05/16/key-banking-system-risks-in-the-waemu-548985"
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    "Authors: Knarik Ayvazyan",
    "Published: May 17, 2024",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798400275142.018",
    "The gradual alignment of prudential regulations on Basel II/III standards since 2018, as well as improvements in banking supervision and macroprudential surveillance, have contributed to the WAEMU’s banking system’s resilience to recent global and regional shocks.",
    "Cyclical vulnerabilities have been contained.",
    "Bank credit portfolios remain highly concentrated.",
    "Exposure to sovereign risks has grown substantially in recent years, together with liquidity risks.",
    "Further reforms building on those recently implemented in line with recommendations from the 2022 Financial Sector Assessment Program (FSAP) will help address such vulnerabilities.",
    "Regulatory alignment: Prudential regulations have been gradually aligned on Basel II/III standards since 2018.",
    "Supervisory improvements: Banking supervision and macroprudential surveillance have improved, contributing to resilience against recent shocks.",
    "Concentration risk: Bank credit portfolios remain highly concentrated.",
    "Sovereign risk: Exposure to sovereign risks has grown substantially in recent years.",
    "Liquidity risk: Liquidity risks have increased alongside sovereign exposure.",
    "Cyclical position: Cyclical vulnerabilities have been contained.",
    "Build further reforms on those recently implemented in line with recommendations from the 2022 Financial Sector Assessment Program (FSAP).",
    "Enhance macroprudential policy’s effectiveness.",
    "Strengthen banking supervision frameworks.",
    "Subject areas: Commercial banks; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Government securities; International organization; Macroprudential policy; Market risk; Monetary policy; Securities.",
    "Keywords: bank credit portfolio; banking supervision framework; Banking System risk; banking system's resilience; banks; Commercial banks; credit gap; financial stability; Global; Government securities; Macroprudential policy; Market risk; risk; risks in the WAEMU; Securities; stress test; Sub-Saharan Africa; WAEMU.",
    "**Key Banking System Risks in the WAEMU; Selected Issues Paper No. 2024/014; March 1, 2024**"
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