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Macro-Prudential Monitoring Indicators for CEMAC Banking System

By Severin Yves Kamgna, Nzesseu Jules Tinang and Kinfak Christian Tsombou

Abstract

The main purpose of this paper is to determine the macro-prudential indicators of financial stability that can be used for supervising the banking system in the CEMAC zone. Going by a set of indicators drawn from similar works on macro-prudential supervision, and, more specifically, aggregate microeconomic variables of the banking sector, macroeconomic variables and combinations of the two, we were able to identify those that are relevant in analysing an imminent deterioration of the banking system in the subregion. At the end of this study, it was realised that claims on the private sector, foreign direct investments and the combination of exports and credits to the private sector, increase the risk of degradation of the banking system, while this risk is reduced by an increase in the exchange rate, increase in the internal resources of the banking system and inflation rate. The regulator should therefore bear this set of indicators in mind in order to facilitate a quick response to offset any potential banking crisis in the CEMAC region.

Topics: C13 - Estimation: General, E58 - Central Banks and Their Policies, C12 - Hypothesis Testing: General, G28 - Government Policy and Regulation, G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Year: 2009
OAI identifier: oai:mpra.ub.uni-muenchen.de:17095

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