Georgia: Technical Assistance Report-Operationalizing the New Bank Recovery and Resolution Framework

International Monetary Fund

No 2023/004, IMF Staff Country Reports from International Monetary Fund

Abstract: This technical assistance report on Georgia focuses on operationalizing the new bank recovery and resolution frameworks. The Georgian authorities have indicated their interest in operationalizing their recovery, resolution, and crisis management frameworks. The report highlights the need to analyze alternatives to the current temporary public funding arrangements, especially the scope to deploy all such funding through the Resolution Fund and the potential use—subject to strict safeguards—of the deposit insurance fund to finance resolution actions. Georgia has made considerable progress in developing the infrastructure needed for an effective bank recovery and resolution regime. The current escalation process from going-concern to gone-concern does not provide the supervisors with sufficient and adequate triggers to mitigate risks at a sufficiently early stage. The mission recommends clarifying Article 30 of the Banking Law, which explicitly mentions only the temporary administrator as early intervention measures. A key recommendation of the mission is to strengthen the National Bank of Georgia’s resolution function. The mission provided guidance on the general architecture of intra- and interagency contingency plans, which serve as the building blocks for a national financial crisis preparedness plan.

Keywords: resolution function; bridge bank resolution tool; bridge-bank playbook; NBG assessment; NBG-MoF bridge bank playbook; Resolution framework; Bank resolution framework; Crisis resolution; Bank resolution; Bridge bank (search for similar items in EconPapers)
Pages: 69
Date: 2023-01-10
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