From Global Standards to Local Realities: Assessing the Effectiveness of Basel Banking Regulations in Africa’s Emerging Financial Markets

Abstract

This paper provides a comprehensive analysis of the evolution and impact of international banking regulation, with particular focus on the adoption of Basel standards in African economies using Nigeria as a primary case study. It traces the historical development of global banking supervision from the establishment of the Bank for International Settlements (BIS) to current Basel III implementation, examining how these frameworks have been adapted across diverse financial systems. The study reveals significant disparities in regulatory capacity and implementation effectiveness between developed and developing banking systems, highlighting Africa’s unique challenges including shallow financial markets, high informality, and competing development priorities. Through Nigeria’s regulatory journey since its 2009 banking crisis, the paper demonstrates both the transformative potential and practical limitations of Basel standards in emerging markets, offering insights into the complex balance between financial stability objectives and economic growth imperatives.