Developing an effective framework for cross-border resolution is a key priority in international regulatory reform. Large bank failures during the global financial crisis brought home the lack of adequate tools for resolving “too-big-to-fail” institutions. In cross-border cases, misaligned incentives and lack of robust mechanisms for resolution and cross-border cooperation left some country authorities with little choice but to take unilateral actions, which contributed to the high fiscal costs of the crisis and resulted in disorderly resolution in some cases

Pan-African banks are expanding rapidly across the continent, creating cross-border networks, and having a systemic presence in the banking sectors of many Sub-Saharan African countries. These banking groups are fostering financial development and economic integration, stimulating competition and efficiency, introducing product innovation and modern management and information systems, and bringing higher skills and expertise to host countries. At the same time, the rise of pan-African banks presents new challenges for regulators and supervisors. As networks expand, new channels for transmission of macro-financial risks and spillovers across home and host countries may emerge. To ensure that the gains from cross border banking are sustained and avoid raising financial stability risks, enhanced cross-border cooperation on regulatory and supervisory oversight is needed, in particular to support effective supervision on a consolidated basis. This paper takes stock of the development of pan-African banking groups; identifies regulatory, supervisory and resolution gaps; and suggests how the IMF can help the authorities address the related challenges.

In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund activities (the “SFA Instrument”). The financing of activities under the terms of the SFA Instrument is implemented through the establishment and operation of a subaccount within the SFA. This paper requests Executive Board approval to establish the AFRITAC Central subaccount under the terms of the SFA Instrument.

Since 2008, many countries across the globe have witnessed the introduction of new recovery and resolution regimes for banks. Whereas much may have been achieved on regional levels, this has not been perfect, and many global challenges remain unsolved. The Research Handbook on Cross-Border Bank Resolution analyses the strengths and weaknesses of the current regulatory framework for cross-border bank crises with contributions from eminent experts from the US, EU, Japan and China. The topic is addressed from both economic, and legal perspectives, with a special section devoted to real-life cases.

The globalisation of the world economy poses significant challenges for policy makers, regulators and legal professionals. The Asian and Brazilian financial crises have shown that difficulties in the banking sectors of some economies can have serious repercussions across world financial markets. It is clear that a sound legal infrastructure is crucial to promote financial stability in this global market. Particularly in the case of international bank failures, the need for harmonised and effective international insolvency procedures is becoming increasingly apparent. It is against this background that the Bank for International Settlements organised a workshop on International Bank Insolvencies in the summer of 1998. This unique book presents the edited workshop papers by expert lawyers from over twenty national central banks, the European Central Bank, the Basle Committee on Banking Supervision and the UN Commission on International Trade Law. Nineteen country reports provide a comprehensive overview of central banks and other institutions responsible for banking supervision and the co-ordination between authorities involved in insolvency procedures. The authors further discuss the instruments employed for crisis prevention and resolution and issues arising in the aftermath of a bank failure in the respective jurisdictions. In addition, twelve expert papers discuss issues ranging from specific national experiences to attempts at co-operation and harmonisation at regional and international level. The book further includes in an annex the text of the UNCITRAL Model Law on Cross-Border Insolvency and the EC Finality Directive.

Global governance of international banks is breaking down after the Great Financial Crisis, as national regulators are withdrawing on their home turf. New evidence presented illustrates that the global systemically important banks underpin the global financial system. This book offers solutions for the effective governance of global banks.