international commercial banking groups we should not assume a monolithic approach to resolution. it is not a case of one size fits all. what i have described could work for banking groups that issue plenty of debt. it would not work so easily for groups operating commercial banks around the world that are funded pretty well entirely from insured deposits. if they haven ’ t issued bonds, then there would be no bond holders to bail in. it has become fairly common to say that such groups should be resolved on a regional basis, ie broken up. maybe. but, even if that is correct, it is obvious that “ break it up ” is an incomplete resolution plan. what happens to the broken - up parts? under a “ breakup ” strategy, one needs a plan for each of the parts, both the distressed and the undistressed parts of the group. under the fsb standard ( ka 11. 8 ), it is clearly the responsibility of the home authorities of the group to ensure that a group wide resolution plan exists. there is no ducking that. it removes an ambiguity that has quietly haunted banking authorities for decades. imagine that some of such a group ’ s regional / local commercial banks are smallish and simple, but that others are very large and complex. ( contrary to what is sometimes imagined, commercial banking can be complex! ) to the extent that the group ’ s problems are in a bank ( s ) that is relatively small and simple, standard “ purchase & assumption ” techniques can be employed. ie break up that bank into a good and bad bit ; and effect a sale of the good and economically critical parts, aided by an injection of resources, in the usual way, by the deposit insurance scheme, up to but not beyond what it would have had to pay out to insured depositors in a liquidation. the critical services are thereby maintained, and the dis becomes a creditor in the administration and realisation of the rump. at the end of that process of realising the assets in the rump, the deposit insurer learns how much it has lost. i want to stress that the di typically incurs losses but discovers how much ex post. bis central bankers ’ speeches now imagine that the commercial bank subsidiary in question is big and complex. the realisation of the assets via a standard rump - administration is liable to destroy a lot of value, increasing the deposit insurer ’ s losses. and in any case that strategy may not be consistent with maintaining stability

harvesh seegolam : launch of the imf monetary and capital markets department & africa training institute online course on core elements of banking supervision speech by mr harvesh seegolam, governor of the bank of mauritius, at the launch of the imf monetary and capital markets department & africa training institute online course on core elements of banking supervision, port louis, 12 april 2021. * * * ladies and gentlemen, good morning and a very warm welcome. it is my pleasure to address you today virtually in the context of this seminar on “ core elements of banking supervision ”. i wish to thank mr wane, the director of imf africa training institute, and mr mohan, expert for the imf on banking supervision at afritac south, for facilitating this seminar. the course, crafted for supervisors who recently joined the world of central banking, has indeed evolved into a flagship program of the imf. it surely reflects the importance of capacity building in banking supervision. i must say that this course is very topical as african countries, just like other nations across the world, are grappling with covid - 19 which is straining not only financial institutions but also supervisors. ladies and gentlemen, the covid - 19 crisis has underlined the frontline role of central banks as providers of immediate response to economic wildfires. indeed, central banks have demonstrated their capacity to muster substantial financial resources rapidly. since march 2020, the bank of mauritius has been actively mitigating the impact of the pandemic on the financial system. in addition to swift monetary policy actions, a blend of conventional and unconventional measures was introduced under the bank ’ s covid - 19 support programme. the measures aim at providing flexibility to banks and economic stakeholders, and safeguard the economy. to support businesses, a special relief amount, a special fx line of credit and swap arrangements for import - oriented businesses were introduced. the setting up of the mauritius investment corporation was a milestone in our endeavour to protect the economy by avoiding the collapse of covid - impacted systemic businesses. capital preservation and regulatory forbearance are other important tools adopted by the bank. in that regard, guidance was given to banks and non - bank deposit taking institutions on the application of ifrs 9 in the current context. optional transitional arrangements were provided for the regulatory capital treatment of ifrs 9 provisions. the cash reserve ratio was lowered, and the implementation of the last tranche of the capital conservation buffer was extended. the bank of mauritius