The framework puts in place effective procedures to ensure that in the extreme event of any problems occurring at banks, the damage to the entire financial system is kept at the minimum.
Tuesday 16, April 2019 BY KUDAKWASHE MUZORIWA
The Central Bank of Oman (CBO) has issued Bank Resolution Framework for Oman, which spells out the recovery and resolution regime for the banking sector.
The framework serves to prepare banks for self-propelled recovery as well as allow authorities to resolve them in an orderly way with least disruption and minimal cost to the national exchequer while preserving financial stability.
CBO stated that the bank resolution framework will be applicable to all banks designated as domestic systemically important banks by the regulator and the central bank may apply all or parts of the framework to any other bank licenced by it at its discretion.
Additionally, the framework also incentivises the banks to adopt strategies that enable the authorities to manage banking crisis with minimal use of public funds while preserving financial stability.