Cross-border banking: The African Experience

Africa has traditionally been a region with a very high share of cross-border banks. However, the composition of cross-border banks in Africa has undergone a distinct change over the past 20 years, with banks from across the continent and other emerging markets taking on a larger role in its financial systems. This paper discusses the effects of this trend on competition, financial deepening (the increased provision and availability of financial services), and financial stability across the continent, and the implications for financial development and regulation. Using a new bank-level data source on foreign banks' home countries, it documents the relative importance that banks from Africa, other emerging markets and developed economies have forged.

There is already in existence a rich literature on the effects of cross-border banking at cross-country, regional and country-level. However, there are very few studies gauging the effects of cross-border banking specifically for African countries. This paper makes the call for more in-depth studies that adopt a specific focus on Africa.

An open access version of the paper is available for download at the link below. It was accepted for publication in Journal of African Economies.

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