West African Economic and Monetary Union: Financial Depth and Macrostability

West African Economic and Monetary Union: Financial Depth and Macrostability
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Volume/Issue: Volume 2013 Issue 005
Publication date: October 2013
ISBN: 9781484348222
$20.00
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Topics covered in this book

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Banks and Banking , Finance , Money and Monetary Policy , DPPP , DP , interbank market , WAEMU bank , financial crisis , interest rate , debt market , WAEMU authorities , WAEMU country , WAEMU interbank market , WAEMU member states , Commercial banks , Financial sector development , Stress testing , West Africa , East Africa , Sub-Saharan Africa

Summary

The financial system in the WAEMU remains largely bank-based. The banking sector comprises 106 banks and 13 financial institutions, which together hold more than 90 percent of the financial system’s assets (about 54 percent of GDP at end-2011). Five banks account for 50 percent of banking assets. The ownership structure of the sector is changing fast, with the rapid rise of foreign-owned (pan-African) banks. This contributes to higher competition but also rising heterogeneity in the banking system, with large and profitable cross-country groups competing with often weaker country-based (and sometime government-owned) banks. Nonbank financial institutions are developing quickly, notably insurance companies, but remain overall small. This paper presents a detailed analysis of the banking system.