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Policy Brief on the Financial Crisis - Preventing a Credit Crunch in Africa - The Role of Financial Regulation


The current financial crisis has highlighted the critical role of efficient regulation for financial stability. Government interventions to bail out banks and non-bank institutions have sought to restore bank liquidity and allow adequate level of bank lending. These measures are symptomatic. They do not address the underlying causes of the problem. Preventing such crises in the future requires commitment to regulatory review at the national and global level.

This briefing note highlights key regulatory principles and goals to guide policy debates; analyses the regulatory status quo in Africa; and defines key strategies required to preserve financial stability and prevent a credit crunch in African economies.

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