{
  "title": "Seychelles: Technical Assistance Report-Emergency Liquidity Assistance and Collateral Frameworks",
  "publication": "Technical Assistance Reports, March 27, 2026",
  "sourceUrl": "https://www.imf.org/en/publications/technical-assistance-reports/issues/2026/03/27/seychelles-technical-assistance-report-emergency-liquidity-assistance-and-collateral-574952",
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  "summary": "IMF technical assistance (TA) supported the Central Bank of Seychelles (CBS) in strengthening its emergency liquidity assistance (ELA) framework and collateral policies to enhance the CBS’s liquidity backstop while safeguarding its balance sheet.",
  "sections": [
    {
      "heading": "Overview and objective",
      "content": "- IMF technical assistance (TA) supported the Central Bank of Seychelles (CBS) in strengthening its emergency liquidity assistance (ELA) framework and collateral policies.\n- Objective: enhance the CBS’s liquidity backstop while safeguarding its balance sheet.\n- Characterization: ELA is described as a targeted, bilateral liquidity instrument distinct from standard liquidity operations, aimed at preserving or restoring financial stability while mitigating moral hazard.\n- Legal and institutional basis: the framework is built on solid legal foundations, public regulation, internal procedures, and a clarified role for the fiscal authority in the provision of ELA."
    },
    {
      "heading": "Findings on ELA framework",
      "content": "- Importance of a coherent and clearly articulated framework encompassing:\n  - Eligibility criteria.\n  - Forward looking solvency and viability assessments.\n  - Well defined decision making processes.\n- Guidance emphasized communicating the ELA framework to key stakeholders—including financial institutions, government entities, and the broader public—to support effectiveness, promote sound market practices, and manage expectations.\n- The TA reviewed existing ELA arrangements and highlighted the need to distinguish ELA from standard liquidity operations to limit moral hazard."
    },
    {
      "heading": "Internal preparedness, governance, and operational readiness",
      "content": "- Key components addressed by the TA:\n  - Clearly documented procedures for assessing ELA requests.\n  - Procedures for calibrating financial terms.\n  - Procedures for evaluating funding plans.\n  - Designing appropriate ELA-related conditionality.\n- Internal responsibilities:\n  - Guidance on internal responsibilities and the need for effective interdepartmental coordination in conducting ELA operations.\n  - Emphasis on clearly defined decision-making processes and coordination with the fiscal authority."
    },
    {
      "heading": "Collateral policy and risk management",
      "content": "- The TA underscored the need to strengthen readiness for stress scenarios by enhancing operational capacity to accept, value, and manage a broader range of collateral.\n- Concrete case studies highlighted operational and methodological priorities:\n  - Systematic collateral scanning.\n  - Pre-positioning arrangements.\n  - Robust valuation methodologies.\n  - Risk based haircut calibration to contain the financial risks associated with emergency lending."
    },
    {
      "heading": "Policy recommendations (implied by TA guidance)",
      "content": "- Establish and publish a coherent ELA framework with:\n  - Clear eligibility criteria.\n  - Forward-looking solvency and viability assessment procedures.\n  - Defined decision-making and coordination protocols with fiscal authorities.\n- Strengthen internal preparedness by documenting procedures to:\n  - Assess requests, calibrate terms, evaluate funding plans, and design conditionality.\n  - Assign internal responsibilities and ensure interdepartmental coordination.\n- Enhance collateral readiness by:\n  - Expanding operational capacity to accept and manage a broader collateral set.\n  - Implementing systematic collateral scanning and pre-positioning.\n  - Applying robust valuation methods and risk based haircuts.\n\n---\n\n Content in this bundle\n\n- IMF Technical Assistance Report — Preface, Executive Summary, Introduction, and Selected Sections\n  - IMF Technical Assistance Report — Preface, Executive Summary, Introduction, and Selected Sections (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - IMF Technical Assistance Report — Preface, Executive Summary, Introduction, and Selected Sections (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/technical-assistance-reports/issues/2026/03/27/seychelles-technical-assistance-report-emergency-liquidity-assistance-and-collateral-574952"
    }
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    "Published: March 27, 2026",
    "Series: Technical Assistance Reports",
    "DOI: https://doi.org/10.5089/9781484335901.019",
    "IMF technical assistance (TA) supported the Central Bank of Seychelles (CBS) in strengthening its emergency liquidity assistance (ELA) framework and collateral policies.",
    "Objective: enhance the CBS’s liquidity backstop while safeguarding its balance sheet.",
    "Characterization: ELA is described as a targeted, bilateral liquidity instrument distinct from standard liquidity operations, aimed at preserving or restoring financial stability while mitigating moral hazard.",
    "Legal and institutional basis: the framework is built on solid legal foundations, public regulation, internal procedures, and a clarified role for the fiscal authority in the provision of ELA.",
    "Importance of a coherent and clearly articulated framework encompassing:",
    "Guidance emphasized communicating the ELA framework to key stakeholders—including financial institutions, government entities, and the broader public—to support effectiveness, promote sound market practices, and manage expectations.",
    "The TA reviewed existing ELA arrangements and highlighted the need to distinguish ELA from standard liquidity operations to limit moral hazard.",
    "Key components addressed by the TA:",
    "Internal responsibilities:",
    "The TA underscored the need to strengthen readiness for stress scenarios by enhancing operational capacity to accept, value, and manage a broader range of collateral.",
    "Concrete case studies highlighted operational and methodological priorities:",
    "Establish and publish a coherent ELA framework with:",
    "Strengthen internal preparedness by documenting procedures to:",
    "Enhance collateral readiness by:",
    "**IMF Technical Assistance Report — Preface, Executive Summary, Introduction, and Selected Sections**"
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