Banking Union Framework in the Economic Community of West African States (ECOWAS): a European Comparison

Cross-border banking has been on the rise in West Africa since the 1990s. Going by the characteristics of financial integration, this trend should indicate a convergence in the banking regulatory frameworks in the sub-region. However, this appears not to be the case. In fact the growth of these banks raise questions about the adequacy of the current regulatory environment for their operation and the potential regional financial stability implications resulting from regulatory gaps. Using the European Union (EU) as a model, this article considers how the gaps in the European financial regulatory framework exacerbated the impact of the global financial crisis in Europe, which transitioned from a financial crisis to a eurozone debt crisis. It also considers theeffects of the gaps in the European regulatory framework on the European Monetary Union (EMU)-which is particularly instructive for the monetary union agenda in West Africa both through the West African Monetary Union (WAEMU) and the West African Monetary Zone (WAMZ). This article, considers the extent to which the pillars of the newly established European Banking Union (EBU) can be adopted in the West African context to help facilitate financial stability as cross-border bank operations increase within the region.