Macroprudential Policies in WAEMU Countries

by | Mar 1, 2017 | Papers | 0 comments

Samuel Guérineau, Michael Goujon, Relwende Sawadogo

Case Study, 28 November 2016 (In French)

This case study reviewed and examined the implementation of macroprudential regulation in the WAEMU countries.

Macroprudential Reforms

The WAEMU countries has initiated a comprehensive reform of its financial stability management instruments, which involves a reform of micro-prudential supervision. The objective of this is to bring the practice to be in line with the basic principles of the Basel Committee. A major implication of this is the adoption of supervision on a consolidated basis of banking groups. The second part of this reform is the introduction of complementary instruments which act at the level of the entire financial system: deposit guarantee fund, financial stability fund, identification of systemically important banking institutions, and the adoption of a macroprudential policy. This case study focuses on the implementation of this macroprudential policy in order to clarify some pertinent issues.

Policy Lessons

The implementation of a macroprudential policy is an important step to improve medium-term financial stability in WAEMU countries. Its effectiveness is however, depending on other microprudential supervision instruments that are also relevant to maintaining financial stability. In view of this complementarity, it is important to continue strengthening these existing instruments so to facilitate a more effective implementation of the new macroprudential regulations.

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