Promoting financial integration in Africa

  • Date(s)May 27, 2014
  • LocationParis
  • Organiser(s)Ferdi, BDF

    May 27, 2014, Paris

    Banque de France - Ferdi Conference

    The process of financial integration consists in strengthening the links between national financial systems to create a broader financial space offering a wider choice of funding and investment opportunities. Concerning both the banking system and financial markets, financial integration allows economies of scale and enhances competition. It provides better access to financial services and, generally, reduces their costs as well as allowing the allocation of capital towards the most profitable projects. Financial integration is thus an instrument of financial development which itself favours economic growth.

    In this perspective, the implementation of financial integration policies raises a number of issues: a) how to make institutional integration, i.e. the adoption of common rules and instruments, translate into a de facto integration via an intensification of financial flows between countries? b) how to coordinate financial integration with other dimensions of integration –monetary, commercial and economic – in order to increase its benefits? c) how to cope with new risks associated with the increase in regional financial flows, and particularly, the risk of financial crisis contagion? and d) how to articulate Africa’s, regional financial integration with global financial integration?

    Objectives

    The aim of the conference was to generate recommendations on how to promote financial integration in Africa, by combining recent academic findings on this topic with the experience of practitioners from both the public and the private sector.

    Conference's partner : the Banque de France

    For further information on events organised by the Banque de France : https://www.banque-france.fr/en/economics-statistics/research/seminars-and-symposiums.html

    Programme and presentations

    Programme PDF   Introduction

    9:00 – 9:30 am

    Marc-Olivier Strauss-Kahn, Director General for Economics and International, Banque de France
    Patrick Guillaumont, President of Ferdi

     

    Inaugural conference: The challenge of financial integration for developing economies

    9:30 – 10h30 am

    Ronald McKinnon, Emeritus Professor, University of Stanford

    Hot Money Flows, Cycles in Primary Commodity Prices, and Financial Control In Developing Countries

     

    Pierre-Richard Agénor, Hallsworth Professor, University of Manchester and Senior Fellow, Ferdi

    L’intégration financière : Théorie, évidences, et leçons des expériences internationales

     

    Session 1: Why promote financial integration in Africa? 

    10:45 – 12:15 am

    The aim of this session is to identify the main benefits expected from financial integration, notably by comparing the various observable African financial integration processes that have to differing extents achieved a degree of commercial, economic and monetary integration.

    • The state of knowledge on financial integration would benefit from focusing on the following questions: 
      • What conditions are needed for a balanced distribution of the benefits of financial integration? 
      • Does a common currency enhance the benefits of integration? 
      • Which lessons can be drawn from the financial integration of the various African regions (Franc zone / Common Monetary Area (SADC) / East African 

    Introduction :

    Christopher Adam, Professor, University of Oxford

    Promoting Financial Integration in Africa - A perspective from the East African Community

    Discussion :

    Anne-Marie Gulde, Deputy Director of the African Department, IMF

    Financial Integration in Africa: Benefits and Safeguards

     

    Sylviane Guillaumont, Emeritus Professor, Cerdi-University of Auvergne   

    Session 2: What are the best ways of promoting financial integration? 

    1:30 – 3:00 pm

    The aim of this session is a) to identify the main obstacles to financial integration in Africa such as the lack of reliable financial information and trust between agents, exchange rate controls, and the persistence of financial protectionism, and b) to discuss the most efficient instruments for overcoming these obstacles.

    • The state of knowledge on existing obstacles and instruments to overcome them
    • Focus on one or more instruments: 
      • how to enhance the reliability of the data in shared debtor information systems (public or private credit databases / credit bureaus, financial information regarding bond issuers) and its use by creditors? 
      • how to reconcile the preference of certain States for capital and exchange rate controls with the process of financial integration? 
      • how to support the development of the interbank market? 

    Introduction :
    Amadou Sy, Senior fellow, Brookings institution

    What Are the Best Ways of Promoting Financial Integration in Sub-Saharan Africa?

     


    Irina Astrakhan, Lead Private and Financial Sector Specialist in East and Southern Africa, World Bank


    Promoting Financial Integration in Africa- Lessons from supporting deeper and more efficient financial sectors in East and Southern Africa

     

    Discussion :
    Antoine Traoré,  Director for banking activities and Enconomic Financing, BCEAO

    Bruno Cabrillac, Director for Economics and International and European Relations, Banque de France

    Amadou Kane,  President of the Board of the National Bank for Economic Development and former Minister of the Economy and Finance of Senegal

    Henri-Claude Oyima,  CEO of the BGFI Bank Group

     

    Session 3: What instruments to maintain the benefits of financial integration? 

    3:15 – 4:45 pm

    The aim of this session is to identify the risks to financial instability stemming from financial integration, such as banking crises and sovereign debt crisis in particular. It will discuss instruments that are better suited to the African context, both in preventing and dealing with such crises ex-post.

    • The state of knowledge on the risks associated with financial integration
    • Focus on one or more instrument(s) for managing financial crisis contagion risks: macro-prudential policies, consolidated supervision and crisis resolution instruments 
      • Micro- and macro-prudential policies: 
        • what can macro-prudential policies do for Africa given the high level of cyclical instability of many African economies? 
        • should micro-prudential norms be adapted to the African context? 
      • Instruments for crisis resolution (financial guarantees and specific capital injections): 
        • what crisis resolution instruments are the most appropriate for African economic contexts (volatile business cycles, high proportions of national incomes from the mining sector, risks of political crises)? 
        • can the instruments for resolving crises in Africa be inspired from mechanisms implemented in Europe or should specific instruments be created? 

    Introduction :
    Christian de Boissieu, Professor, University of Paris 1 and at the Collège d’Europe, Member of the AMF Board

    Discussion :
    Paul Derreumaux, Honorary President of Bank of Africa Group and Administrator of BOA Group, Holding of Bank of Africa Group

     Emmanuel Carrère, Senior advisor, International Directorate, ACPR

    Intégration financière et supervision bancaire : une perspective Européenne
     

    Abbas Mahamat Tolli, Secretary General, Banking Commission of Central Africa (COBAC)

     


    Hiba Zahoui, Deputy Director for Banking Supervision, Bank Al-Maghrib

    Supervision des banques marocaines panafricaines

     

     

    Round table: regional financial integration and financial globalisation

    4:45 – 5:45 pm

    This panel should focus on how to reconcile the regional financial integration of African economies with their integration into the international financial system. For example, is it possible to foster international funding of Africa while protecting the continent from the risks associated with global financial markets.

    Opinion of panellists on 3 questions:

    • Is there a preferable sequence going from regional integration to continental integration and then to global integration?
    • Are there ways of preventing the attractiveness of a financially well-integrated region going hand in hand with the risk of capital flight?
    • Is Asian and Latin American experience with currency crises relevant for Africa?

    Abdoulaye Bio Tchané, Chairman of the Board of the African Guarantee Fund, former Director for Africa at the IMF

    Christian Durand, Deputy Director General for Economics and International, Banque de France

    Sylviane Guillaumont, Emeritus Professor, Cerdi-Université d’Auvergne

    Anne-Marie Gulde, Deputy Director of the African Department, IMF

    Anthony Requin, Assistant Secretary Multilateral affairs, trade and development policies department, French Tresory

    Lionel Zinsou, President of PAI Partners

     Closing remarks 

    5:45 – 6:00 pm

    Patrick Guillaumont, President of Ferdi
    Christian Durand, Deputy Director General for Economics and International, Banque de France


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