AfDB, IMF Regional Workshop on Cross-Border Banking in Nairobi, Kenya

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The African Development Bank (AfDB) organized, through its NEPAD, Regional Integration and Trade Department, in collaboration with the Monetary and Capital Markets Department of the International Monetary Fund, a regional training workshop on cross-border banking and consolidated supervision from 6-10 December 2010 in Nairobi, Kenya, as follow-up activities to the AfDB’s study on “Financial Sector Integration in three regions in Africa”. The goal of the workshop was to promote effective and efficient cross-border banking supervision in developing supervisors’ capacity to effectively monitor cross-border banking activities within the Arab Maghreb Union, the Monetary and Economic Community of Central Africa (CEMAC), the Common Market for Eastern and Southern Africa and the East African Community regions.

The supervision of banks across borders encourages policy and regulatory reforms which would enhance financial stability and increase competitiveness, resulting in reduced cost of financial services. The subsequent opening of financial markets would facilitate cross-border mergers and intra-regional banking and financial services, resulting in greater efficiency, diversification, competition, and lower cost of doing business. This would also enhance competition, efficiency and productivity and facilitate the flow of goods.

The workshop was attended by some 32 participants, including central banks, banking and financial supervision authorities, IMF staff, banking supervision experts and private banks representatives.

The key objectives of the workshop were to provide an opportunity for supervisors to improve their skills by understanding the key issues and challenges of cross-border banking supervision through a practical and interactive approach that involves case studies, group work and discussions, as well as the prospect of sharing experiences with supervisors from other African regions. The workshop also aimed at discussing a collaboration and partnership framework between the AfDB, the IMF, African central banks and banking supervisory authorities to enhance supervisors’ capacity in cross-border banking and consolidated supervision.

In order to implement effective cross-border banking activities in these regions, the workshop highlighted the major challenges and constraints in implementing cross-border banking and consolidated supervision and came up with recommendations and concrete proposals for follow-up activities. Participants agreed that raising compliance level with Basel Core Principles 24 and 25 without further delay was the first priority in order to create a basic level playing field. They have also agreed that technical assistance enhancing the capacity to exercise cross-border supervision was to be organized on a short-term basis. They have also recommended to organize cross-border banking supervisory colleges relying on the expertise and/or assistance of the Committee of European Banking Supervisors.

The African Development Bank was represented by Moono Mupotola, Division Manager and Gabriel Mougani, Principal Financial Economist.

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