International Monetary Fund. Monetary and Capital Markets Department
INTERNATIONAL MONETARY FUND
The current legislative framework guiding bank resolution and financial sector crisis management is weak and the authorities have embarked on revising it. The BoB lacks some of the legal powers required for implementing corrective action for banks that are in breach of prudential requirements or are conducting their business in an unsound or unsafe manner. In particular, existing corrective action powers are too dependent on the BoB having exercised examination powers, while others are constrained by a linkage to de-licensing powers. Key elements for a corrective action framework, including a contingency plan for dealing with weak banks and guidance on indicative remedial measures based on well-defined triggers, are also lacking.