African Regulators Must Work Together To Tackle Cross Border Risks – Experts
The continent's financial regulators are facing a daunting task of managing risks that transcend national borders. The Central Bank of Nigeria (CBN) has highlighted the importance of collaboration among African financial regulators in ensuring stability and shared prosperity across the continent. Governor Olayemi Cardoso has urged African regulators to deepen cooperation in managing cross-border risks, emphasizing that regional financial integration is outpacing political coordination.
The increasing interconnectedness of African banks and financial systems has created a pressing need for regulators to work together. Cardoso called for the adoption of shared prudential principles tailored to Africa's realities, which would enable regulators to respond jointly and effectively to emerging vulnerabilities while supporting inclusive growth. The CBN has taken proactive steps to strengthen the resilience of Nigerian banks, launching the Banking Sector Recapitalisation Programme in 2024. This initiative has inspired similar reforms across Africa, with Nigerian banks attracting significant foreign investment and expanding their footprint across African markets.
The CBN's commitment to robust corporate governance has been a key factor in its success. Governor Cardoso has emphasized the importance of ending years of regulatory leniency and restricting banking services to chronic defaulters. The bank has implemented a restriction on banking services to non-performing large-ticket obligors, reinforcing credit discipline, financial integrity, and accountability.
As African regulators continue to navigate the complexities of cross-border risks, their ability to work together will be crucial in ensuring stability and shared prosperity across the continent.
The CBN's call for African regulators to work together is a timely reminder of the need for collaboration in managing cross-border risks. The increasing interconnectedness of African banks and financial systems has created a pressing need for regulators to put aside national interests and work towards a common goal. By adopting shared prudential principles, African regulators can respond jointly and effectively to emerging vulnerabilities, supporting inclusive growth and stability across the continent. The CBN's commitment to robust corporate governance is a model for other African countries to follow, and its success in attracting foreign investment and expanding its footprint across African markets is a testament to the benefits of proactive leadership.
