{ "title": "Maldives: Financial Sector Assessment Program-Technical Note on Macroprudential Policy", "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-macroprudential-policy-543932", "canonical": "https://www.imf.org/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932", "overlayPath": "/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932/index.md", "summary": "This Technical Note on Maldives discusses macroprudential policy. The creation of a macroprudential committee with a clear mandate and decision-making powers is recommended.", "sections": [ { "heading": "Key findings", "content": "- Creation of a macroprudential committee with a clear mandate and decision-making powers is recommended.\n- The committee should rely on a well-resourced financial stability unit to act as a secretariat and provide data-driven recommendations.\n- The Maldives Monetary Authority (MMA) needs to develop a set of early warning indicators and further develop its macroprudential toolkit.\n- A comprehensive dashboard of both broad-based and sectoral indicators would help monitor systemic risks.\n- Indicators to consider for implementation include credit, real-estate development, corporate performance, and household indebtedness.\n- Introduction of several key macroprudential instruments would help prevent the emergence of systemic risk.\n- MMA should follow through on its plan to introduce two household-related instruments.\n- The Financial Sector Assessment Program team recommends developing additional instruments to:\n - safeguard bank liquidity, and\n - reduce the currency mismatch of banks,\n as well as adopt other instruments recommended by the Basel Committee on Banking Supervision." }, { "heading": "Policy recommendations", "content": "- Establish a macroprudential committee with explicit mandate and decision-making authority.\n- Resource and staff a financial stability unit to serve as the committee’s secretariat and to prepare data-driven policy recommendations.\n- Create and maintain a comprehensive dashboard combining broad-based and sectoral early warning indicators.\n- Implement household-related macroprudential instruments as planned by MMA.\n- Develop liquidity-focused macroprudential instruments to safeguard bank liquidity.\n- Introduce measures to reduce banks’ currency mismatch consistent with Basel Committee recommendations.\n- Expand MMA’s overall macroprudential toolkit in line with international best practices." }, { "heading": "Suggested indicators and monitoring", "content": "- Broad-based indicators:\n - Credit indicators\n - Real-estate development indicators\n - Corporate performance indicators\n - Household indebtedness indicators\n- Sectoral indicators: (to be included in the comprehensive dashboard alongside broad-based indicators)" }, { "heading": "Implementation priorities and sequencing", "content": "- Immediate: Establish committee, staff the financial stability unit, and begin producing data-driven recommendations.\n- Near-term: Create the dashboard and a set of early warning indicators.\n- Short- to medium-term: Introduce the two planned household-related instruments.\n- Medium-term: Develop liquidity protection instruments and measures to reduce currency mismatch; adopt additional Basel Committee–recommended instruments.\n\nInternational Monetary Fund. Maldives: Financial Sector Assessment Program-Technical Note on Macroprudential Policy, January 19, 2024.\n\n---\n\n Content in this bundle\n\n- IMF FSAP Technical Note — Maldives\n - IMF FSAP Technical Note — Maldives (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - IMF FSAP Technical Note — Maldives (PDF){rel=\"external\" type=\"application/pdf\"}" } ], "bullets": [ "[Markdown version](/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932/index.md)", "[Structured JSON version](/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932/index.json)", "[Bundle manifest](/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932/bundle-manifest.json)", "Published: January 19, 2024", "Series: IMF Staff Country Reports", "DOI: https://doi.org/10.5089/9798400266430.002", "Creation of a macroprudential committee with a clear mandate and decision-making powers is recommended.", "The committee should rely on a well-resourced financial stability unit to act as a secretariat and provide data-driven recommendations.", "The Maldives Monetary Authority (MMA) needs to develop a set of early warning indicators and further develop its macroprudential toolkit.", "A comprehensive dashboard of both broad-based and sectoral indicators would help monitor systemic risks.", "Indicators to consider for implementation include credit, real-estate development, corporate performance, and household indebtedness.", "Introduction of several key macroprudential instruments would help prevent the emergence of systemic risk.", "MMA should follow through on its plan to introduce two household-related instruments.", "The Financial Sector Assessment Program team recommends developing additional instruments to:", "Establish a macroprudential committee with explicit mandate and decision-making authority.", "Resource and staff a financial stability unit to serve as the committee’s secretariat and to prepare data-driven policy recommendations.", "Create and maintain a comprehensive dashboard combining broad-based and sectoral early warning indicators.", "Implement household-related macroprudential instruments as planned by MMA.", "Develop liquidity-focused macroprudential instruments to safeguard bank liquidity.", "Introduce measures to reduce banks’ currency mismatch consistent with Basel Committee recommendations.", "Expand MMA’s overall macroprudential toolkit in line with international best practices.", "Broad-based indicators:", "Sectoral indicators: (to be included in the comprehensive dashboard alongside broad-based indicators)", "Immediate: Establish committee, staff the financial stability unit, and begin producing data-driven recommendations.", "Near-term: Create the dashboard and a set of early warning indicators.", "Short- to medium-term: Introduce the two planned household-related instruments.", "Medium-term: Develop liquidity protection instruments and measures to reduce currency mismatch; adopt additional Basel Committee–recommended instruments.", "**IMF FSAP Technical Note — Maldives**" ], "related": [ { "title": "IMF FSAP Technical Note — Maldives", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/cr/2024/english/1mdvea2024003.pdf", "summary": { "path": "/-/media/files/publications/cr/2024/english/1mdvea2024003.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/cr/2024/english/1mdvea2024003.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932/index.md", "json": "/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932/index.json", "bundleManifest": "/en/publications/cr/issues/2024/01/19/maldives-financial-sector-assessment-program-technical-note-on-macroprudential-policy-543932/bundle-manifest.json" }, "generatedAtUtc": "2026-09-11T17:45:10.571Z" }