Global law firm Norton Rose Fulbright has launched a comparative guide on the state of recovery and resolution laws for banks in Africa.
Banks require specific resolution arrangements as a result of their interconnectedness with each other, the rest of the financial system, and the real economy. A credible recovery and resolution regime not only impacts depositors, it can also have potential impacts on international debt markets, rating agencies and correspondent banking. The firm’s interactive guide provides an overview of the requirements applicable to over 20 jurisdictions across Africa.
Working with colleagues and correspondent law firms from across Africa, Norton Rose Fulbright’s global banks team undertook a review, examining:
- If banks are required to prepare recovery and resolution plans
- Can the resolution authority transfer shares of the bank and/or its assets
- If the recovery and resolution regime can suspend the rights of contractual counter-parties to enforce rights such as security
- If the regime provides for compensation where creditors would be worse off
- If bank directors and officers are protected from liability for decisions made by the resolution authority.
The online guide allows clients to build their own comparative reports regarding the key elements of recovery and resolution as described by the Financial Stability Board’s Key Attributes for Effective Resolution Regimes for Financial Institutions.
Alan Bainbridge, a financial institutions partner at Norton Rose Fulbright, commented: “The African banking sector has grown significantly over the past decade. Increasing numbers of international banks and regulators are strategically focussed on Africa, as illustrated by the Bank of England’s new partnership with central banks in Ghana, Sierra Leone and South Africa. Recovery and resolution planning is a key issue for African banks and our guide provides in-depth insight on the state of banks’ recovery plans in the region.”