## Maldives: Financial Sector Assessment Program-Technical Note on Financial Safety Net and Crisis Management Arrangements

_IMF Staff Country Reports, January 19, 2024_

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## Bibliographic details
- Published: January 19, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400266256.002

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### Summary / Executive findings
- 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.

### Shortcomings identified
- 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.

### Key policy recommendations
- 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.

### Thematic focus and keywords
- 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

*Source: Maldives: Financial Sector Assessment Program-Technical Note on Financial Safety Net and Crisis Management Arrangements, January 19, 2024 (IMF Staff Country Reports 2024, 020).*

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_Source: https://www.imf.org/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-financial-safety-net-and-543924_