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VOL. 3, ISSUE 3 (2021)
The pragmatism of CEMAC bank distress rescue measures: A treatment dose in function of the level of distress
Authors
HDR Nah Thomas Fuashi
Abstract
The banking profession is a very delicate one, based on the premise that one of the activities of a bank is the reception of money from the public with a view of subsequently reimbursing it when demanded. This is the basis of a judicial authority (Foley v. Hill) 1 establishing the legal principle that the relationship between a bank and the customer is a debtor- creditor relationship (the bank being the debtor and the customer the creditor). Needless to evoke the important role banks play in promoting national and international economic activities. Bank failure can therefore be very catastrophic. In the face of bank failure, customers risk losing their deposits and the economy may suffer from depression. Mindful of these negative consequences of bank failure, the Economic Community of Central African States (CEMAC) enacted Regulation No. 02/14/CEMAC/UMAC /COBAC on 14 April 2014 fixing the legal regime applicable for the treatment of banks in difficulties. Considering that the level of bank distress may vary from one bank to another, the regulation is pragmatic enough to have ushered a treatment dose in function of the level of distress. It provides a treatment dose for banks whose liquidity and solvency are merely threatened, and something different for banks in which insolvency has settled. This article seeks to explore the mechanism for the administration of these treatment measures to banks in difficulties within the CEMAC Zone.
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Pages:24-31
How to cite this article:
HDR Nah Thomas Fuashi "The pragmatism of CEMAC bank distress rescue measures: A treatment dose in function of the level of distress ". International Journal of Law, Policy and Social Review, Vol 3, Issue 3, 2021, Pages 24-31
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