Financial Deepening Dynamics and Implication for Financial Policy Coordination in WAEMU
Christian Nguena () and
Temilade M. Abimbola
Chapter 9 in Regional Integration and Policy Challenges in Africa, 2015, pp 201-219 from Palgrave Macmillan
Abstract Regional integration is well known to suppose economic convergence as a good framework for policy coordination. Indeed convergence is a process which implicitly supposes the reduction of heterogeneity and creates an environment in which the policy-maker can coordinate and apply the same policy. This implies that to coordinate financial policy for example, you must be sure that the dynamics of financial development is convergent in order to know when the coordination is possible. Concerning the West African Economic and Monetary Union (WAEMU) subregion, we have on one hand an implementation of a common monetary policy for all of the member states and on other hand a financial policy for each state. Since regional financial integration, there has been the creation in 1996 of a financial market in the WAEMU subregion within a supranational regulator (CREPMF). The necessity of rethinking financial policy in view of potential coordination should be therefore the next important step. Should we implement it now or if not, when? Is it appropriate to implement a common monetary policy now in the subregion?
Keywords: economic convergence; financial deepening; panel data econometrics; principal component analysis; WAEMU subregion (search for similar items in EconPapers)
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