Policy expertise

Cross Border Supervision in SADC Region

Policy Area
Country/Region
International
Funder
Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ)
Duration
2012-2013
OPM contact

This project has provided critical insights into cross-border banking operations in the Southern African region. The financial crisis has highlighted the need for improved regulation and supervision to ensure the resilience and competitiveness of financial markets across the continent. We were commissioned by GIZ to conduct a study of cross-border supervision and regulation in the Southern Africa Development Community (SADC) with the aim of identifying areas for effective reform. We used desk-based research and fieldwork to map existing operations in the region including key relationships and the risks and opportunities inherent in them. This was complemented by comprehensive Political Economy Analysis to identify structural and political barriers to reform. The evidence we gathered has provided a knowledge-base to support the strengthening of the cross-border supervisory framework in the region.

The financial crisis has put financial regulation and supervision reform back on the policy agenda across Africa. Supervisors are revisiting their approaches to implementing international regulatory and supervisory standards with a focus on increasing the resilience of African financial systems when faced with a variety of crisis scenarios.

While international banks continue to play a vital role on the continent, African markets remain dominated by the cross-border operations of African financial groups. This project addressed the need to explore these operations and understand the role of Regional Economic Communities (RECs) and other bodies in order to help inform effective reform in the sector.

 

Our team of financial sector experts used both primary and secondary research methods to conduct a comprehensive study of cross-border supervision in the Southern African Development (SADC) region.

During the first phase of the project, we undertook a review of the structure of the financial sector in the region, with a particular focus on those financial institutions active in cross-border operations. As well as mapping the current situation of cross-border supervision in the SADC region, we reviewed a number of best practice international models (both multilateral and bilateral), exploring their applicability within the SADC context.

Based on this first phase of work, we conducted primary research in a number of countries to identify how strategic policies were translating into action on the ground. This work was complemented by extensive Political Economy Analysis (PEA) to highlight the structural and political barriers to improvement in the region as well as the key actors and relationships and opportunities for reform.

Key areas of work included:

  • Mapping the existing landscape of cross-border supervision in the SADC region
  • Conducting a review of international best practice models on cross-border supervision
  • Undertaking fieldwork in a number of focus countries including: Namibia, South Africa, Mozambique and Mauritius
  • Conducting comprehensive Political Economy Analysis (PEA) to identify key sector stakeholders, relationships, opportunities and constraints
  • Developing recommendations to improve the institutional design and effectiveness of the cross-border supervisory framework in SADC
 

This project has provided critical insights into cross-border banking operations in the SADC region. As a result of our work, GIZ and other stakeholders are now better informed about the structural and political problems affecting cross-border regulation in the region.

Over the longer-term, this knowledge-base will help support the implementation of strategies that strengthen regulation and supervision of the financial sector in Africa, helping ensure its resilience, efficiency and competitiveness within a changing global context.

 
Associate Consultant
Associate Consultant
Associate Consultant
Senior Consultant