Financial Sector Assessment Program – Technical Note on Systemic Liquidity Analysis

West African Economic and Monetary Union: Financial Sector Assessment Program – Technical Note on Systemic Liquidity Analysis



Publication date:

August 25, 2022

Electronic access:

Free download. Use the free Adobe Acrobat Reader software to view this PDF file




Summary:

The limited development of markets in the region represents a key risk factor for financial stability. 1 Since the previous Financial Sector Assessment Program (FSAP) in 2008, the bank deposit base has increased from 18% to 30% of gross domestic product (GDP) and the dynamism of the government securities market has benefited from the interruption of public deficit financing by the Central Bank of West African States (BCEAO). Nevertheless, a significant part of bank financing cannot be considered stable, due to the concentration of deposits held by large companies. Apart from the reserves held with the BCEAO, the banks have little liquidity, even if the secondary market for government securities is beginning to develop for certain issuers. The insufficient liquidity of the secondary market and the prevalence of unsecured intra-group transactions (60% of the total) in the interbank market exacerbate the risk and the magnitude of potential losses for banks in the event of liquidity difficulties.


Series:

Country Report No. 2022/280


Matter:





Frequency:

usual


English

Publication date:

August 25, 2022

ISBN/ISSN:

9798400217869/1934-7685

Stock number:

1WAUEA2022005

Pages:

44


About Irene J. O'Donnell

Check Also

Gray Bruce’s virtual emergency care program is expanding

By Janice MacKay September 14, 2022 3:38 p.m. An expanded virtual emergency care program from …