{
  "title": "Maldives: Financial Sector Assessment Program-Technical Note on Financial Safety Net and Crisis Management Arrangements",
  "publication": "IMF Staff Country Reports, January 19, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-financial-safety-net-and-543924",
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  "summary": "This paper highlights technical note on financial safety net and crisis management arrangements in Maldives. Maldives legislation includes important elements of a financial safety net and crisis management framework but there are areas for streamlining and improvement.",
  "sections": [
    {
      "heading": "Summary / Executive findings",
      "content": "- Maldives legislation includes important elements of a financial safety net and crisis management framework but there are areas for streamlining and improvement.\n- The Maldives Banking Act (MBA) provides tools for the Maldives Monetary Authority (MMA) to implement early intervention and resolution measures.\n- There are shortcomings that need to be addressed to enhance both frameworks and align them with international good practices."
    },
    {
      "heading": "Shortcomings identified",
      "content": "- The triggers for initiating resolution should be strengthened including a forward-looking perspective.\n- The governance trigger should be enhanced by providing links to bank’s capacity to maintain adequate systems and controls and to effectively manage its risks.\n- The requirement for the delivery of a conservator’s report should not be a prior requirement to implementing resolution powers, as this may jeopardize the timely implementation of effective resolution actions."
    },
    {
      "heading": "Key policy recommendations",
      "content": "- Amend the MBA to empower the MMA to trigger resolution.\n- Amend the MBA so that resolution powers can be applied immediately for a bank deemed nonviable or likely nonviable.\n- Introduce forward-looking resolution triggers.\n- Enhance the governance trigger to explicitly link to a bank’s capacity to maintain adequate systems and controls and to effectively manage its risks.\n- Remove the prior requirement that delivery of a conservator’s report is necessary before implementing resolution powers, to avoid jeopardizing timely resolution actions."
    },
    {
      "heading": "Thematic focus and keywords",
      "content": "- Subject: Bank resolution, Bank resolution framework, Bridge bank, Crisis prevention, Financial crises, International organization, Lender of last resort, Monetary policy\n- Keywords: A. depositor protection, Bank resolution, Bank resolution framework, Bridge bank, capital market development authority, Crisis prevention, deposit insurance regulation, FSAP assessment's finding, Global, IMF-World Bank Financial Sector Assessment Program, inter-agency arrangement, Lender of last resort, Maldives banking Act, staff team of the International Monetary Fund\n\nSource: Maldives: Financial Sector Assessment Program-Technical Note on Financial Safety Net and Crisis Management Arrangements, January 19, 2024 (IMF Staff Country Reports 2024, 020).\n\n---\n\n Content in this bundle\n\n- 1mdvea2024002\n  - 1mdvea2024002 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1mdvea2024002 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: January 19, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400266256.002",
    "Maldives legislation includes important elements of a financial safety net and crisis management framework but there are areas for streamlining and improvement.",
    "The Maldives Banking Act (MBA) provides tools for the Maldives Monetary Authority (MMA) to implement early intervention and resolution measures.",
    "There are shortcomings that need to be addressed to enhance both frameworks and align them with international good practices.",
    "The triggers for initiating resolution should be strengthened including a forward-looking perspective.",
    "The governance trigger should be enhanced by providing links to bank’s capacity to maintain adequate systems and controls and to effectively manage its risks.",
    "The requirement for the delivery of a conservator’s report should not be a prior requirement to implementing resolution powers, as this may jeopardize the timely implementation of effective resolution actions.",
    "Amend the MBA to empower the MMA to trigger resolution.",
    "Amend the MBA so that resolution powers can be applied immediately for a bank deemed nonviable or likely nonviable.",
    "Introduce forward-looking resolution triggers.",
    "Enhance the governance trigger to explicitly link to a bank’s capacity to maintain adequate systems and controls and to effectively manage its risks.",
    "Remove the prior requirement that delivery of a conservator’s report is necessary before implementing resolution powers, to avoid jeopardizing timely resolution actions.",
    "Subject: Bank resolution, Bank resolution framework, Bridge bank, Crisis prevention, Financial crises, International organization, Lender of last resort, Monetary policy",
    "Keywords: A. depositor protection, Bank resolution, Bank resolution framework, Bridge bank, capital market development authority, Crisis prevention, deposit insurance regulation, FSAP assessment's finding, Global, IMF-World Bank Financial Sector Assessment Program, inter-agency arrangement, Lender of last resort, Maldives banking Act, staff team of the International Monetary Fund",
    "**1mdvea2024002**"
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