on their banks have meant that these international banks are doing less business within africa, opening up an opportunity for larger african based banks to enter new african markets. the integration process is however slow and not without its challenges, as i will elaborate on shortly. 3. benefits of cross - border banking growth in african cross - border banking has not been confined to south africa ’ s four largest private banks. banks from nigeria, morocco and kenya, including banks such as ecobank and the united bank of africa, have also taken advantage of emerging opportunities. the united nations world economic situation and prospects 2014. imf balance of payments statistics, february 2014. bis central bankers ’ speeches resulting increase in the availability of banking services to segments of the african population previously excluded from formal banking, has contributed to enhancing the culture of savings and entrepreneurship with obvious benefits for economic growth and development within the region. with this, africa has taken significant steps towards having a relatively mature banking system and has increased the resilience of the region to systemic risk 3. the arrival of regional african banks has improved the efficiency of the banking sector in host countries. they stimulate competition, and increase the diversity of available financial services, generally at transactional lower costs, improved quality and potentially lower interest rates 4. this in turn positively affects household savings and consumption and the availability of credit to businesses, leading to gains in employment and standards of living. furthermore, cross - border integration has the significant benefit of forcing the domestic banking regulatory and supervisory systems to modernize as larger capital flows within a country necessitate improved regulatory frameworks, technological innovation and efficient payment systems 5. these modernizations also create opportunities for greater financial inclusion, both with regard to individuals and smes. 4. challenges for integration while cross border banking creates significant benefits, it also is associated with challenges which need to be considered. unlike the euro area, where most banks have made relatively similar progress in implementing the basel iii framework, african jurisdictions are still at varying stages of implementing the various basel capital standards. first, operating in multiple countries creates supervisory and compliance challenges. the banks are expected to report to both home and host country supervisors who may use different regulatory standards or may interpret similar standards in different ways. in many cases, the same information is reported to different supervisors in different formats as per the relevant supervisor ’ s requirements, which often causes duplicate reporting or banking entities operating in different jurisdictions may have to provide reporting on potentially all three basel standards. these differences become even more pronounced when considering

, or to the detriment of the stability of the financial system. • maintain the emphasis on information exchange : there is already a pronounced effort to make existing mechanisms of information exchange more meaningful, such as memoranda of understandings ( mou ) between home and host countries. this was a principal aim of the sadc subcommittee of banking supervisors ( ssbs ) initiated in 2006 6. unfortunately, due to differences in accounting standards, reporting requirements, off - site monitoring systems, regulatory frameworks and supervisory practices, drafting and implementing effective mou ’ s is difficult and they are not always used for their intended purpose. • efforts should be made to create databases that are useful and available to all african regulators and regional workshops should be encouraged ( such as the enhanced data dissemination for africa regional workshop held in 2011 ). such initiatives contribute to skills development and information sharing, and create opportunities to develop new connections between regulators and new means for coordinating and standardizing the methods for compiling, processing and disseminating data. • supervisory colleges have proven to be highly useful in ensuring information sharing and relationship building between supervisors and are therefore valuable tools to promote. effective consolidated supervision of an international banking group requires the home supervisor to have sufficient knowledge of the operations of the group, both domestic and foreign, so as to monitor, assess and deal with risks faced by the group. as noted by past roundtable discussions on regional banks in africa, regional economic communities ( rec ), in which most pan - african financial banking groups operate, can be very useful in this regard due to their specific focus on building supervisory capacity and strengthening cross - border regulations 7. • ensure that existing crisis management and resolution plans are enhanced and put in place to withstand financial crises : prompt and effective responses to potential financial distress are important to avoid severe systemic disruptions and minimise the risk of banking failures. if not properly managed, supervisory co - operation might collapse when a financial crisis hits as protection of national assets will become very important. establishing upfront crisis management and resolution plans will facilitate robust supervisory co - operation which should withstand the pressure of a crossborder financial crisis. 6. conclusion in conclusion, financial integration in africa has already had a positive effect on the growth potential of the continent. it is, however, vitally important that the integration process continues to be monitored by the regulatory authorities to ensure its success and sustainability. without an integrated regulatory authority environment, achieving a robust integrated financial system would be difficult. it is therefore important that we