## Botswana: Financial Sector Assessment Program-Technical Note on Financial Sector Safety Nets, Crisis Management, and Bank Resolution Framework

_IMF Staff Country Reports, March 5, 2024_

## Source details

**Canonical URL:** [Botswana: Financial Sector Assessment Program-Technical Note on Financial Sector Safety Nets, Crisis Management, and Bank Resolution Framework](https://www.imf.org/en/publications/cr/issues/2024/03/05/botswana-financial-sector-assessment-program-technical-note-on-financial-sector-safety-nets-545504)

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## Bibliographic details
- Published: March 5, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400269073.002

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### Overview
- This technical note highlights financial sector safety nets (FSN), crisis management, and bank resolution framework in Botswana.
- The financial safety net framework in Botswana is incomplete, while crisis preparedness and management structures must be expanded.
- The authorities are poised to significantly improve the FSN and Crisis Management framework.

### Key findings
- The financial safety net framework in Botswana is incomplete.
- Crisis preparedness and management structures must be expanded.
- The Financial Stability Council (FSC) is identified as the institutional vehicle to develop system-wide safety nets and crisis management arrangements.
- The FSC’s statutory responsibilities include mandates outlined in the Bank of Botswana Amendment Act, 2022.

### Policy recommendations and operational priorities
- Implement a suitable law for the Deposit Insurance Scheme of Botswana.
- Prepare an action plan for operationalizing the Deposit Insurance Scheme, including:
  - Clear funding arrangements through bank contributions.
  - A public backstop for the scheme.
- Develop safety nets aligned with good international practices in the financial regulatory architecture.
- The FSC should prioritize work over the near- to medium-term to develop these safety nets.
- Expand the FSC to include a crisis preparedness and management mandate.
- The FSC should:
  - Oversee high-level monitoring of the financial system.
  - Analyze the risks affecting the system.
  - Discuss appropriate policies to mitigate those risks.
  - Formally introduce system-wide crisis management protocols to plan and implement solutions in the event of a crisis.

### Institutional reforms and mandates
- The FSC should be expanded consistent with its statutory responsibilities in the Bank of Botswana Amendment Act, 2022.
- A formally mandated FSC crisis preparedness and management function is necessary to coordinate and implement system-wide protocols when crises emerge.

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_Source: https://www.imf.org/en/publications/cr/issues/2024/03/05/botswana-financial-sector-assessment-program-technical-note-on-financial-sector-safety-nets-545504_