IMF urges WAEMU to comply with international banking regulations
However, the institution stressed that progress has been made to strengthen regulation.The regulatory framework for banking supervision in the WAEMU region was praised by the International Monetary Fund (IMF).
The institution considers that significant progress was made in 2015 to strengthen the regulation and banking supervision and modernise the financial sector of the union.
In a statement posted on its website, it nevertheless recommends that economic authorities continue their efforts by further aligning regulations with international standards and best practices and by strictly enforcing prudential rules and regulations.
Key reforms include raising the minimum share capital for credit institutions, accelerating the pace of the transposition of Basel II and III norms into the regulatory framework, promoting the establishment of credit bureaus, and putting in place a bank crisis resolution mechanism and a deposit guarantee fund.
The IMF also urges WAEMU institutions to develop an active interbank market and secondary market for public securities in order to raise monetary policy effectiveness.
It adds this also requires better controlling of the refinancing of banks and broadening of the financial market investor base.
The institution concludes that "achieving continued strong, sustainable, and inclusive growth requires ongoing efforts to improve the business climate as well as to reduce income and gender inequalities so as to facilitate better allocation of productive resources."