Industry overview
In major African economies, the banking industry is typically segmented into tiers based on asset size, regulatory capital, and systemic importance. Tier 2 banks in Africa could correspond broadly to mid-tier or second-line banks in other regions such as Europe and North America. They are distinguished by the following features:
- Regulatory capital
Tier 2 banks in Africa meet higher capital adequacy standards than smaller lenders but remain below Tier 1 thresholds. They typically face tighter liquidity constraints and lighter regulatory scrutiny compared to systemically dominant banks.. In North America, mid-sized regional banks (U.S. banks with assets between $100–250bn) face slightly lower systemic scrutiny than the “global systemically important banks” (G-SIBs), though capital stress testing requirements are similar. - Systemic importanceIn Africa, Tier 2 banks are classified as important but not dominant players. Their failure could cause regional disruptions but not broad-based systemic collapse. In North America, the category aligns with Category III
