While the role of market discipline has been much discussed in academic and policy literature as a potentially central element of a financial regulatory system, it had not been significantly developed and implemented by regulators themselves. The crisis has pushed some market discipline ideas to the fore. Here again, I think there are three important measures.
You will agree with me that the crisis which initially hit African countries with stronger financial linkages to international capital markets; significant trade relations with the Western world and rich natural resource countries set the stage for challenging times in policy making and implementation. Africa’s prospects in the post-crisis period are contingent on the behaviour of policymakers.