Unravelling the mystery behind bank insolvencies in the East African Community (EAC) – the case for Uganda, Kenya and Tanzania

This chapter analyses the collapse of banks and financial institutions in Uganda, Kenya and Tanzania, three of the key Member States of the EAC. The causes and impact of bank insolvencies in these Member States’ banking sectors are examined. The chapter begins with an historical overview of banking and its evolution in these Member States prior to the 2007 – 2008 global financial crisis, and the response to this crisis, examining the safeguards that were implemented by these Member States to combat subsequent financial crises. This is followed by an analysis of the factors that have inhibited the functionality of these safeguards, leading to a high number of bank insolvencies in these Member States. The chapter concludes by calling for a regional cross-border banking and resolution framework across the EAC as a measure that would combat bank insolvencies in the region.