{
  "title": "Malta: Financial Sector Assessment Program-Technical Note-Bank Resolution and Crisis Management",
  "publication": "IMF Staff Country Reports, November 21, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2019/11/21/malta-financial-sector-assessment-program-technical-note-bank-resolution-and-crisis-48828",
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  "summary": "This technical note analyzes laws, policies, and procedures for bank failure mitigation and resolution, and for preparation and management of a financial crisis in Malta.",
  "sections": [
    {
      "heading": "Scope and objectives",
      "content": "- Analyzes laws, policies, and procedures for bank failure mitigation and resolution, and for preparation and management of a financial crisis in Malta.\n- Addresses:\n  - supervision of bank recovery plans,\n  - early intervention when problems are identified,\n  - resolution planning,\n  - resolution funding,\n  - deposit insurance."
    },
    {
      "heading": "Key findings",
      "content": "- Implementation of recovery planning requirements for banks remains a work in progress.\n- Written policies and procedures should be adopted on the application of early intervention powers.\n- While legal triggers and power for early intervention in problem banks are adequate, the powers in relevant legislation overlap substantially.\n- Actions are needed to support the use of bank resolution powers.\n- Weaknesses exist in the bank liquidation and insolvency framework:\n  - Lack of clarity regarding the legal regime applicable to bank winding-up and insolvency.\n  - Lack of clarity regarding the creditor hierarchy in liquidation.\n- Impediments to implementation of the resolution tools are being identified and need to be addressed.\n- Preparations need to be made for using the bridge institution resolution tool."
    },
    {
      "heading": "Policy recommendations and operational priorities",
      "content": "- Finalize and implement recovery planning requirements for banks.\n- Adopt written policies and procedures governing the application of early intervention powers.\n- Clarify and reconcile overlapping powers in relevant legislation to reduce legal uncertainty for early intervention.\n- Strengthen the legal and operational framework to support the use of bank resolution powers.\n- Address weaknesses and legal uncertainty in the bank liquidation and insolvency framework, including clarifying creditor hierarchy in liquidation.\n- Identify and remove impediments to implementation of specific resolution tools.\n- Prepare operationally and legally to deploy the bridge institution resolution tool.\n\n---\n\n Content in this bundle\n\n- 1mltea2019005\n  - 1mltea2019005 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1mltea2019005 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: November 21, 2019",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513520803.002",
    "Analyzes laws, policies, and procedures for bank failure mitigation and resolution, and for preparation and management of a financial crisis in Malta.",
    "Addresses:",
    "Implementation of recovery planning requirements for banks remains a work in progress.",
    "Written policies and procedures should be adopted on the application of early intervention powers.",
    "While legal triggers and power for early intervention in problem banks are adequate, the powers in relevant legislation overlap substantially.",
    "Actions are needed to support the use of bank resolution powers.",
    "Weaknesses exist in the bank liquidation and insolvency framework:",
    "Impediments to implementation of the resolution tools are being identified and need to be addressed.",
    "Preparations need to be made for using the bridge institution resolution tool.",
    "Finalize and implement recovery planning requirements for banks.",
    "Adopt written policies and procedures governing the application of early intervention powers.",
    "Clarify and reconcile overlapping powers in relevant legislation to reduce legal uncertainty for early intervention.",
    "Strengthen the legal and operational framework to support the use of bank resolution powers.",
    "Address weaknesses and legal uncertainty in the bank liquidation and insolvency framework, including clarifying creditor hierarchy in liquidation.",
    "Identify and remove impediments to implementation of specific resolution tools.",
    "Prepare operationally and legally to deploy the bridge institution resolution tool.",
    "**1mltea2019005**"
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