Financial Sector Development in African Countries: Major Policy Making Issues

✍ Scribed by Omotunde E. G. Johnson

• Publisher: Palgrave Pivot
• Year: 2020
• Tongue: English
• Leaves: 149
• Category: Library

✦ Synopsis

This Palgrave Pivot begins with a broad focus on financial sector development as a whole, highlighting areas such as the money market, payment system, and the capital market, as well as issues such as regulatory strategy, capacity building of financial firms and service providers, and financial inclusion. In the area of foreign exchange market policies, the book argues that African countries should aim for social efficiency of the markets, which would include soundness of their foreign exchange systems, from an economic growth perspective, and fairness from an income distributional perspective. Finally, in recognition of the fact that some African countries desire financial systems that are strong enough to be international centers of finance, the policy-making implications of that ambition are discussed.

This book will be of interest to scholars and students in development economics, finance, and money and banking, as well as policy-makers and practitioners. Further, international organisations and independent research organisations interested in economic development in general or financial system development issues will also find this book of value.

✦ Table of Contents

Preface
Contents
List of Tables
Chapter 1: Introduction
Chapter 2: Getting the Basics Right
Toward Coherence in Policymaking
Sound Environment for Financial System Policymaking
Governance
Designing and Implementing a Financial Sector Development Program
Social Efficiency of Financial Markets Matter
Transaction and Operating Costs
Major Policy Concerns and Overarching Challenges in Most African Countries
Financial Sector Development Plans across the Continent
Getting the Fundamentals Right: Capacity Building
Innovation System
Human Capital
Financial Capability of the Populace
Getting the Fundamentals Right: Microeconomic Incentives to Enterprises
Openness
Taxation
Administrative Barriers
Legal Environment
Getting the Fundamentals Right: General Governance
Macroeconomic Policies
Socio-political Governance
Compliance with Appropriate International Standards and Codes
Regulatory Strategy
Financial Risks and Their Management
Regulation Versus the Market
Corporate Governance
The Compensation System and Risk Taking
Early Warning Signals
Organizational Structure: Unified or Not?
The Role of the Central Bank Under a Unified Structure
Tiered Regulation of Financial Institutions
Major Policy Areas of Focus in the Financial Market Development Process
Money Market Development
Payment System Development
Capital Market Development and Economic Growth
Financial Inclusion
Mobile Money
Community Banks
Member-Based ‘Banking’ Organizations
Microcredit
Long-Term Regular Bank Finance for Small and Medium Non-micro Enterprises
Traditional Saving Facilities for the Lowest Income Individuals and Groups
Insurance
References
Chapter 3: Establishing Socially Efficient Foreign Exchange Markets
Introduction
Social Efficiency
Governance Issues for a Socially Efficient Forex System: Transparent Macroeconomic Policy Framework
Oversight Ensuring Sound Operations and Governance of Forex Markets
Selective Intervention in Forex Market
Exchange Rate Regime Objectives
The Exchange Rate Regime, Economic Growth, and Inflation
Forex Market Development and Governance
Socially Efficient Forex Regime and Management
Governance of the Forex Market
Ensuring Open, Competitive, and Socially Efficient Behavior in Forex Markets
Incorporating Behavioral Factors into the Light of Neo-classical Rationality
Systemic Fundamentals to Help Facilitate the Emergence of a Socially Efficient Forex Market
Sound Macroeconomic Policy Environment
Comprehensive Financial System Development Policymaking and Implementation
Sound Financial Regulation and Oversight
Monetary and Fiscal Policy Coordination
Selective Intervention in Forex Market Operations and the Fear of Floating
Concluding Remarks
References
Chapter 4: Attaining Sound International Financial Center Status
A Financial Center as a Cluster
Benefits of Clustering
Organizational Issues
Finding a Niche
Clientele
Products and Services
Providers
Enhancing Competitiveness: Capacity Building
Innovation System
Human Capital
Infrastructure and Public Services
Enhancing Competitiveness: Microeconomic Incentives to Enterprises
Openness
Taxation
Administrative Obstacles
Legal Environment
Enhancing Competitiveness: General Governance
Macroeconomic Policies
Socio-political Governance
Compliance with Appropriate International Standards and Codes
Regulation, Supervision, and Oversight of Center
Approaches to Regulation
Corporate Governance
Organizational Structure in Supervision: Unified or Not
Promoting the Center
Accessing Global Value Chains
Other Selective Intervention Policies
Possible Enclave Privileges
Conclusion
References
Index