12th BCBS-FSI High-level Meeting for Africa on "Strengthening financial sector supervision and current regulatory priorities", Cape Town, South Africa, 26-27 January 2017
2 February 2017
The Basel Committee on Banking Supervision (BCBS), the Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) and representatives from various sub-Saharan African central banks and supervisory authorities met in Cape Town at the 12th High-level Meeting, hosted by the South African Reserve Bank (SARB).
In his keynote address, SARB Governor Lesetja Kganyago shared his views on the challenges sub-Saharan Africa faces in the context of implementation of regulatory reforms. He mentioned de-risking activities by many internationally active banks, especially with regard to correspondent banking. Correspondent banks' adjusted business models are aimed at reducing reputational risk, de-risking and increased regulation, especially with regard to anti-money laundering and the countering of terrorist financing, as well as revised risk-return assessments.
BIS General Manager Jaime Caruana argued in his keynote address that progress has been made towards improving financial stability as the main pillars of the regulatory reform agenda have nearly been finalised. He highlighted the need for proper and consistent implementation of the reforms for internationally active banks while accepting the principle of "proportionality" for smaller and less sophisticated banks.
Meeting participants discussed in more detail the issue of correspondent banking in some African countries, highlighting that one of the critically important functions for migrant workers is sending remittances. The discussion showed the challenge for affected economies from the reduced number of correspondent banks, which increases concentration risk and costs. However, both the number of transactions and the total volume seem to be of lesser impact.
The debate on governance and culture in banks emphasised the importance of good governance to help banks strengthen their performance and risk management. This should ultimately lead to an increase in lending to small and medium-sized entities. Discussion on key supervisory priorities, emerging practices in supervision and how best to perform effective forward-looking supervision reflected some of the findings of a recent FSI survey on supervisory priorities in non-BCBS jurisdictions. These are increased digitisation in finance, the threats to the viability of traditional bank business models and proper implementation of a forward-looking approach to supervision.
The event was co-chaired by Mr Kuben Naidoo, Deputy Governor and Registrar of Banks, SARB and Mr Fernando Restoy, Chairman, FSI. The countries, regional central banks and institutions represented were: Angola, the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO) representing Benin, Burkina, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo; the Banque des États de l'Afrique Centrale (BEAC) representing Central African Republic, Congo, Cameroon, Gabon, Equatorial Guinea and Chad; Botswana, Lesotho, Malawi, Mauritius, the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI), Mozambique, Nigeria, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe, the European Banking Authority, the Institute of International Finance and the Financial Services Volunteer Corps.
Note to editors
The FSI was jointly created in 1998 by the BIS and the BCBS to assist supervisors around the world in improving and strengthening their financial systems.
The FSI is located in Basel, Switzerland.
The FSI offers an extensive annual programme of activities and events in Switzerland and around the world, with different audiences and areas of focus depending on the nature of the event.
Find further information on the FSI.