State of bank recovery and resolution laws in Africa

A closer look at Africa’s banking sector

Banks require specific resolution arrangements as a result of their interconnectedness with each other, the rest of the financial system, and the real economy. A credible recovery and resolution regime not only impacts depositors, it can also have potential impacts on international debt markets, rating agencies and correspondent banking.

Working with colleagues and correspondent law firms from across Africa, we undertook a review concerning the state of recovery and resolution laws for banks against the FSB Key Attributes*. The key issues we examined include:

• Requirements to prepare recovery and resolution plans
• Powers to transfer shares of the bank and/or its assets
• Suspensions of counterparties’ ability to exercise termination and security rights
• Impacts on creditors and protections to ensure that they are no worse off than in an insolvency
• Protection for bank directors and officers from liability for decisions made by the resolution authority

We developed ‘State of bank and recovery and resolution laws in Africa’ as part of our NRF Institute to provide a practical overview of the requirements applicable to more than 20 jurisdictions across Africa.

You can use the guide to:

• Create and customise your own reports – compare multiple jurisdictions or report on them individually
• Learn about the key themes drawn from the study
• Gain regional insight by examining the key findings and impacts across each jurisdiction

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*In response to the 2008 global financial crisis, the Financial Stability Board (FSB) published its ‘Key Attributes for Effective Resolution Regimes For Financial Institutions’. These attributes set out the core elements that the international body considers to be necessary for an effective resolution regime.