Cross-border crisis simulation exercise in sub-Saharan Africa

• The Financial Stability Institute conducted a cross-border crisis simulation exercise with financial authorities from eight countries in sub-Saharan Africa.
• The participants coordinated well and developed sound strategies for responding to the bank failure under their domestic frameworks.
• The report on the exercise makes recommendations based on the findings.

In February 2023, financial authorities in eight countries in sub-Saharan Africa participated in a crisis simulation exercise (CSE) to test their preparedness for managing a bank failure.

The CSE's objective was to enable the participating authorities to assess the effectiveness of their crisis management frameworks and cross-border cooperative arrangements in a controlled environment and to provide them with an opportunity to identify areas for improvement.

The exercise involved 11 central banks and deposit insurers from Botswana, Eswatini, Ghana, Kenya, Lesotho, Namibia, Nigeria and South Africa in an invented scenario based on the failure of a fictional regionally systemic cross-border banking group.

The report contains general findings and recommendations on topics including crisis management tools, recovery and resolution planning, liquidity and resolution funding, domestic decision-making procedures and cross-border cooperation and information-sharing

JEL classification: G01, G21, G28, G33

Keywords: crisis simulation exercise, crisis management, bank resolution, cross-border cooperation, information-sharing, resolution funding