International Journal of Developing and Emerging Economies (IJDEE)

EA Journals

Banking Supervision and Financial Soundness in Developing Countries: Insights on South Sudan

Abstract

The commercial banking industry in South Sudan has faced a myriad of challenges in playing its’ central role of supporting economic development.  Several critical medium-term and long-term difficulties have faced the banking sector in South Sudan as it seeks to come up with a productive regulatory environment. Due to the nascent development of regulatory mechanisms post attaining independence the banking industry has mainly focussed on traditional services. This has resulted in most commercial banks facing financial soundness and sustainability challenges due to limited product and service diversification. The aim of this paper was to identify the challenges facing banking supervision in developing economies and provide insights on what can be done to foster financial soundness in the commercial banks. The paper indicated that poor legislation, inadequate technical support, lack of structural reforms, political challenges and poor regulatory framework have limited the development and financial stability within the country. Critical to improving the financial soundness of the banks is introduction of regulatory activities that can foster the monitoring and supervision of commercial banks in the country. Further, incentivizing financial industry players will lead to long-term value creation through strengthening the financial system and improving integration. The study also advocates for strict introduction of enforcement mechanisms that will ensure commercial banks adhere to the stipulated regulations and guidelines in the operations. Finally, advocating for strategic changes in the services offering and improving cross-border trading will be key to enhancing the commercial banks soundness.

 

Keywords: South Sudan, banking supervision, developing countries, financial soundness

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This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 Unported License

 

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Email ID: editor.ijdee@ea-journals.org
Impact Factor: 8.01
Print ISSN: 2055-608X
Online ISSN: 2055-6098
DOI: https://doi.org/10.37745/ijdee.13

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