Seychelles: Technical Assistance Report-Bank Resolution Framework

Technical Assistance Reports, July 10, 2024

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Seychelles: Technical Assistance Report-Bank Resolution Framework

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Bibliographic details

• Published: July 10, 2024
• Series: Technical Assistance Reports
• DOI: https://doi.org/10.5089/9798400280948.019

Summary

• The IMF conducted technical assistance to the Central Bank of Seychelles (CBS) to provide policy and legal guidance on drafting legal amendments.
• The amendments are intended to:
  • provide an adequate institutional framework and effective powers for bank resolution;
  • contribute to financial stability;
  • limit the use of public funds; and
  • address moral hazard concerns.
• The mission provided recommendations on corrective actions, emergency liquidity assistance (ELA), and bank resolution frameworks to enhance alignment with international best practices, the FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions (KAs), and good practice.

Findings and Policy Recommendations

• Provide legal amendments to establish an adequate institutional framework and effective resolution powers for the CBS.
• Limit use of public funds in resolution and include measures to address moral hazard.
• Strengthen corrective action frameworks for early intervention.
• Clarify and align Emergency Liquidity Assistance (ELA) arrangements with best practice.
• Enhance bank resolution frameworks to align with FSB’s Key Attributes and other good practice.
• Recommend consideration of resolution funding mechanisms and resolution options (including bridge bank arrangements and entry into resolution procedures).
• Promote domestic coordination and cross-border coordination in resolution planning and implementation.
• Encourage recovery plans, resolution plans, and resolvability assessments for financial institutions.

Scope and Thematic Coverage

• Subjects covered include: Bank resolution; Bank resolution framework; Bridge bank; Financial crises; Financial institutions; Financial sector policy and analysis; Financial sector stability; Options.
• Keywords listed: bank resolution, Bank resolution framework, bank resolution law, banking, Bridge bank, corrective actions, cross border coordination., deposit insurance scheme, domestic coordination, emergency liquidity assistance, entry into resolution, Financial sector stability, financial stability, Global, IMF legal department, IMF Monetary, IMF's Monetary, key attributes, MCM STX, moral hazard, Options, public funds, recovery plans, request of the Central Bank of Seychelles, resolution funding mechanism, resolution options, resolution plans, resolvability assessments, Seychelles, South Asia.

Content in this bundle

• Preface — IMF technical assistance mission to the Central Bank of Seychelles, January 16–20, 2023
  • Preface — IMF technical assistance mission to the Central Bank of Seychelles, January 16–20, 2023 (Markdown version)
  • Preface — IMF technical assistance mission to the Central Bank of Seychelles, January 16–20, 2023 (PDF)