«Un a farmer in Morocco and a trader on Wall Street are connected by the invisible threads of the global economy“. This image put forward by Martin Moloney, deputy secretary general of the Financial Stability Board (FSB), clearly illustrates the interconnection of economies on the planet.
While the latter promotes trade and investment, it also amplifies vulnerabilities, exposing financial systems to cross-border crises. Economic interconnection is vividly illustrated in cross-border payments, vital for many African economies. These transfers play a crucial role for households and communities, but current infrastructure does not meet the needs. Indeed, they remain costly, opaque and slow, thus limiting their positive impact on financial inclusion.
«Strengthening cross-border payments must be a global priority», underlines Martin Moloney. However, this objective faces a persistent dilemma: how to combine technological innovation and accessibility for vulnerable populations? This challenge reveals the tensions that run through all financial systems, where every sector must now deal with emerging and growing risks.
New challenges for insurance
Payments are only one facet of the transformations underway. Another key sector, that of insurance, is facing profound upheavals. Although it has long been seen as less exposed to systemic risks than banks, it is now facing new challenges.
According to Romain Paserot, deputy secretary general of the International Association of Insurance Supervisors (IAIS), the accumulation of complex and illiquid assets in insurers’ portfolios, combined with geopolitical tensions and the impacts of climate change, is further weakening companies. . “The increasing complexity of risks requires increased vigilance“, he warns. These changes reflect a structural evolution which is not limited to the insurance sector. The transformations also affect emerging financial technologies, which, although promising, come with their own challenges. Among financial innovations, cryptoassets and central bank digital currencies (CBNCs) are attracting growing interest. “These technologies can transform access to financial services, but they pose significant dangers to financial stability», alerts Martin Moloney. The recent banking turmoil in the United States and Switzerland is a reminder that global interconnection can transform a local incident into a global crisis. This underlines the urgency of appropriate international regulation, but also of increased vigilance to protect developing economies.
International cooperation more essential than ever
In Africa, financial crises are often compounded by external factors, such as geopolitical conflicts and natural disasters. These elements accentuate the fragility of economies and underline the importance of regional cooperation mechanisms. Romain Paserot insists on the urgency of establishing effective crisis resolution mechanisms to limit contagion. In this regard, the African Continental Free Trade Area (ZLECAF) could play a strategic role.
Speaking by videoconference, Dr. Rama Krishna Sithanen, the new governor of the Bank of Mauritius, sees this initiative as an essential lever to harmonize financial regulations and strengthen economic resilience. “Regulation adapted to regional realities is essential to prevent debt crises and stabilize economies“, he says. This harmonization must be accompanied by coordinated monetary policies to address the challenges linked to sovereign debt and economic vulnerabilities. The acceleration of financial innovations and the amplification of systemic risks make international cooperation more essential than ever. For Africa, this means combining regional regulation and modernization of financial infrastructure.
Cryptoactives and MNBC: A revolution under high vigilance
The wali of the central bank announced that the bill governing cryptoassets was in the adoption phase. This marks a major advance in the management of cryptoassets and financial innovations in Morocco. Remember that since 2017, BAM has become aware of the risks linked to these digital assets and has regularly warned the population. However, faced with their expansion on a global scale and the evolution of international regulatory frameworks, Morocco has chosen to take a proactive approach. For Jouahri, the objective is clear: “to offer sufficient protection to users and investors while taking advantage of the possibilities offered by these technologies”. This strategy seeks to combine regulatory prudence and exploration of the economic opportunities of cryptoassets. Furthermore, BAM is also interested in the implications of digital currencies issued by central banks (MDBC).
F.T.
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