Towards Effective International Banking Regulation and Supervision: The Position of Africa and Case for Global Financial Inclusion

Abstract

This dissertation explores the position and roles of developing countries especially, African countries, in the International Standard Setting Bodies (SSBs) such as the Basel Committee. It interrogates the fairness, efficacy and propriety of the standards set by these bodies especially the Basel Committee in stabilising the global banking and financial industry. It highlights the continuous core domination in these bodies and the relegation of the countries in the peripheries to the position of rule takers. It examines the context specificity of the African banking and financial environments and highlights the need to take those contexts into consideration in formulating global banking and financial standards. To succeed in its aims, the research employs an evolutive model of legal research embedded with other legal research approaches such as historical, doctrinal, comparative, and critical legal theory. The research shows that the international SSBs do not take into consideration the peculiarity of the African banking, financial and regulatory environments when formulating the global banking and financial regulatory and supervisory standards and this neglect led to African countries implementing global banking standards that are not calibrated to their banking and financial environment. The research reveals that implementing those standards impacted adversely on the continent’s banking and economic system and have put the continent at a competitive disadvantage in terms of development. It contends that the present global banking regulatory architecture and standards are inadequate to meet the needs of most African countries and are not also capable of stabilising the global banking and financial industry and need to be reformed. The dissertation thus recommends among others increased representation and roles of developing countries in the global SSBs. It is suggested that the global SSBs take cognisance of the differentiated standards and build proportionality to their regulatory standards to make it easier for them to be adapted in many jurisdictions. It also recommends that the possible trade-offs be considered before adopting and implementing global banking standards, especially as regards African countries. It calls for the regulation of other institutions like those engaged in shadow banking activities and fintech that posed a systemic risk to the global banking and financial industry.