Financial Sector Development in Africa: Opportunities ... - World Bank

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170 Fuchs, Losse-Mueller, and Witte Macro-Prudential Oversight Most regulators in Africa view macro-prudential regulation as a key challenge, and the development of macro-prudential supervisory capacity— with the exception of a very few countries—is in its infancy. Independent of the adherence to new international standards, the development of macro-prudential supervisory capacity is of crucial importance to most African supervisors. The economic structure of many African economies often results in high direct and indirect risk concentrations in a few sectors, often natural resources, and macroeconomic risks are often more significant for financial stability than the risks of individual institutions. Still, most central banks lack dedicated surveillance units, and the buildup of macro-prudential supervisory capacity imposes a range of new demands that many regulators are unable to meet at this point. It requires new cross-cutting skills combining macroeconomic analysis and regulation, new modeling techniques, data collection and analysis, and practical criteria for triggers and intervention. The additional resource demands are considerable, particularly with regard to skills, training, modeling, technology, and data. In addition, macro-prudential supervision requires a cultural change from a passive rules-based supervisory approach to active risk management. Regulators may lack the legal authority for intervening on the basis of macro-prudential factors (rather than institution-specific factors). Regulators need to work with governments to determine how far they are prepared to intervene in the event of a buildup of systemic risk. As a stepping-stone, African regulators might focus first on establishing dedicated macro-prudential surveillance units before moving to fullfledged macro-prudential supervision (including intervention powers). The development of international standards for tools and measures to monitor macro-prudential risks could inform similar exercises that are adjusted to the existing resource and data constraints by African regulators. Regional Cross-Border Supervisory Coordination and the New International Supervisory Architecture Cross-border supervisory issues are increasingly important for African regulators. The continent has long had an international banking presence. Recent inward investment by international banking groups and the emergence of Africa-based regional banking groups have significantly increased cross-border banking activity. Although international banks continue to play a vital role on the continent, African markets are in fact dominated by the cross-border operations of African financial groups.
The Reform Agenda for Financial Regulation and Supervision in Africa 171 Figure 5.7 shows that the total assets of African banks in Sub-Saharan African operations by far exceed the engagements of large international banking groups in the region, such as Barclays, Citibank, and Standard Chartered. Effective supervision of cross-border financial institutions requires closer cooperation between the supervisors in the respective institution’s home country and in the host country where the institution’s subsidiary is operating. This is also a key issue in advancing consolidated supervision. Figure 5.7 Cross-Border Operations of African and International Banking Groups Assets of African Operations (in US$ millions) 0 20,000 40,000 60,000 80,000 100,000 120,000 Barclays in Sub-Saharan Africa CITI GROUP in Sub-Saharan Africa Stanchart in Sub-Saharan Africa Standard Bank of South Africa FirstRand ABSA Group Nedbank United Bank of Africa Zenith Oceanic Bank Ecobank Bank PHB Guaranty Trust Bank Access Mauritius Commercial Bank Bank of Africa Kenya Commercial Bank BancABC International banks Africa-based banks Source: Lukonga 2010.
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lic Disclosure Authorized Public Di
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Financial Sector Development in Afr
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Contents Foreword Acknowledgments E
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Contents vii PART III Safeguarding
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Contents ix 4.4 Size of Mortgage Lo
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xii Foreword In their own way, each
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xiv Acknowledgments led by Stefan N
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xvi Editors and Contributors of Acc
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xviii Editors and Contributors deve
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xx Abbreviations FSB FSD FSDT FSI G
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2 Beck and Maimbo to the bottom of
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4 Beck and Maimbo advocate a “bui
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CHAPTER 1 Microfinance in Africa Al
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Microfinance in Africa 9 Figure 1.1
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Microfinance in Africa 11 A Special
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Microfinance in Africa 13 Figure 1.
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Microfinance in Africa 15 Impedimen
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Microfinance in Africa 17 Figure 1.
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Microfinance in Africa 19 to physic
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Microfinance in Africa 21 Understan
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Microfinance in Africa 23 Some exam
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Table 1.2 Fanikisha Project Type of
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Microfinance in Africa 27 world reg
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Microfinance in Africa 29 implicitl
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Microfinance in Africa 31 Financial
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Microfinance in Africa 33 situation
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Microfinance in Africa 35 have yet
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Microfinance in Africa 37 9. This i
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Microfinance in Africa 39 Ehrbeck,
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CHAPTER 2 Mobile Financial Services
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Mobile Financial Services in Africa
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Table 2.2 African First- and Second
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Table 2A.1 ID and SIM Registration
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79 Guinea Yes http://fr.allafrica.c
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Togo Yes http://www.mediaf.org/fr/t
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84 Coates and Hofmeister chains. It
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86 Coates and Hofmeister unions in
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88 Coates and Hofmeister trap for t
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90 Coates and Hofmeister Sources of
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92 Coates and Hofmeister Box 3.1 Ca
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94 Coates and Hofmeister farm input
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96 Coates and Hofmeister Technical
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98 Coates and Hofmeister agree to b
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100 Coates and Hofmeister Box 3.3 C
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102 Coates and Hofmeister Attitudes
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104 Coates and Hofmeister developin
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106 Coates and Hofmeister specifica
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108 Coates and Hofmeister ———
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CHAPTER 4 Housing Finance Simon Wal
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Housing Finance 113 Figure 4.1 Mort
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Housing Finance 115 countries, down
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Housing Finance 117 • The housing
Page 141 and 142: Housing Finance 119 limited to a fe
Page 143 and 144: Housing Finance 121 housing and inf
Page 145 and 146: Housing Finance 123 borrowed by ext
Page 147 and 148: Housing Finance 125 Box 4.1 Afforda
Page 149 and 150: Housing Finance 127 Box 4.2 South A
Page 151 and 152: Housing Finance 129 the degree to w
Page 153 and 154: Housing Finance 131 markets is the
Page 155 and 156: Housing Finance 133 are unable to o
Page 157 and 158: Housing Finance 135 greenfield vent
Page 159 and 160: Housing Finance 137 Figure 4.5 Obst
Page 161 and 162: Housing Finance 139 changes in the
Page 163 and 164: Housing Finance 141 • Introduce a
Page 165 and 166: Housing Finance 143 Box 4.6 Progres
Page 167 and 168: Housing Finance 145 of the impact o
Page 169 and 170: Housing Finance 147 funds. Within s
Page 171: Housing Finance 149 Hassler, O., an
Page 175 and 176: CHAPTER 5 The Reform Agenda for Fin
Page 177 and 178: The Reform Agenda for Financial Reg
Page 191: The Reform Agenda for Financial Reg
Page 199: PART IV Financial Sector Reform: Ac
Page 202 and 203: 180 Dafe lack access to external in
Page 204 and 205: 182 Dafe having a positive theory o
Page 206 and 207: 184 Dafe In sum, high transaction c
Page 208 and 209: 186 Dafe through the selective allo
Page 210 and 211: 188 Dafe institutions of the indust
Page 212 and 213: 190 Dafe the boundaries of informat
Page 214 and 215: 192 Dafe range of examples of both
Page 216 and 217: 194 Table 6.1 Period Since the end
Page 218 and 219: 196 Dafe state-owned financial inst
Page 220 and 221: 198 Dafe The degree of success, in
Page 222 and 223: 200 Dafe Although the current conse
Page 224 and 225: 202 Dafe The interdependence of the
Page 226 and 227: 204 Dafe in the 1980s and 1990s wer
Page 228 and 229: 206 Dafe Alternative Approaches to
Page 230 and 231: 208 Table 6.2 Approach to explain/
Page 232 and 233: 210 Dafe state-centered, and interd
Page 234 and 235: 212 Dafe particularly important fac
Page 236 and 237: 214 Dafe Table 6.3 (continued) Mana
Page 238 and 239: 216 Dafe activism in the developing
Page 240 and 241: 218 Dafe structures can undermine m
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220 Dafe Conclusion There is strong
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222 Dafe policy is not straightforw
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224 Dafe banks that open agents in
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226 Dafe Bankable Frontier Associat
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228 Dafe Goldsheid, R. 1958. “A S
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230 Dafe ———. 2001. Types of
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