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In February, the IMF published a report identifying shortcomings in cross-border supervision and oversight of Africa’s largest banks, which continue to expand rapidly across the region. The report failed to get much notice at the time and, perhaps surprisingly, none of the leading banks in Africa made public statements on its findings.
The report is an important turning point in the current discussion of cross-border regulation in Africa. It and warns that the rise of pan-African banks could lead to increased transfer of macro-financial risks across countries and that transparency within the banking sector is on a downward trend.
This makes for an interesting juxtaposition: as African banks are building branches and representative offices outside headquarter countries and are becoming systemically more important within African regions, they are also becoming less accountable.
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