Georgia: Financial Sector Assessment Program-Technical Note-Financial Safety Net, Resolution and Crisis Management
IMF Staff Country Reports, September 30, 2021
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- Georgia: Financial Sector Assessment Program-Technical Note-Financial Safety Net, Resolution and Crisis Management
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Bibliographic details
- Published: September 30, 2021
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781557753724.002
Executive summary
- Since the prior FSAP the authorities have comprehensively updated the legal, policy and procedural framework for failing bank resolution.
- In 2019 both the NBG and Banking Laws were amended to provide the authorities with powers to resolve banks that in the past might have been deemed too-big-to-fail; this eventuality is now greatly diminished.
- In 2017 a Deposit Insurance System Law was adopted to provide protection to natural person depositors when a bank fails and is liquidated.
- In 2020 the NBG published a series of rules specifying its policies and procedures for the use of its new powers, and jointly with the MoF published regulations addressing the use of temporary public funding to mitigate the potential systemic implications of bank failures.
Major findings and developments
- Legal and institutional reform:
- Amendments in 2019 to the NBG and Banking Laws expanded resolution powers.
- Adoption in 2017 of a Deposit Insurance System Law to protect natural person depositors in liquidation.
- Operational guidance:
- In 2020 the NBG issued rules specifying policies and procedures for exercising new resolution powers.
- Joint NBG and MoF regulations in 2020 address use of temporary public funding to mitigate systemic implications of bank failures.
- Systemic risk implications:
- The combination of legal amendments, deposit insurance, and operational rules has greatly diminished the likelihood that banks will be treated as too-big-to-fail.
Subject areas and keywords
- Subject: Bank resolution, Bank resolution framework, Bridge bank, Crisis management, Crisis resolution, Financial crises, International organization, Monetary policy
- Keywords: Bank resolution, Bank resolution framework, Bridge bank, Crisis management, Crisis resolution, D. deposit insurance, deposit insurance agency, deposit insurance system, insurance State supervision service, NBG liquidity support
Content in this bundle
- Technical Note: Financial Safety Net Arrangements in Georgia