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This report aims at assisting Maldives Monetary Authority (MMA) to establish an effective oversight framework to monitor the different payment and settlement systems, payment instruments and payment service providers in the Maldives. The framework for oversight is based on the Bank for International Settlement-International Organization of Securities Commissions (BIS-IOSCO) 24 principles and analyzing the payments development in the Maldives, while emphasizing the importance of overseeing several critical aspects of payment systems which are not within the radar of the present oversight unit. The BIS-IOSCO principles that are specifically on oversight function are set out in section one. Section two discusses the background and the present payment landscape, legal status, and critically review the present oversight arrangement by MMA, its mandate and suggest areas of improvement for an improved and effective oversight function. Section three outlines the present and future challenges for payment and settlement oversight unit (PSSOU) and provides guidelines to overcome some of the challenges. Section four sets out recommendations to be adopted by PSSOU and section five articulates the most urgent tasks that should be undertaken by PSSOU and MMA to ensure an effective oversight on the national payments system (NPS) in the Maldives.

Finance and Financial Sector Development --- Financial Regulation and Supervision --- Systemic Risk

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Executive Summary 
EBITDA multiples can be misleading in valuing a business. Too often, owners hear that a friend or competitor sold their business for "eight times EBITDA" and assume that metric can be applied to their businesses. This is not to say that there is no information in a multiple; rather, there is so much information imbedded in this one ratio that the shortcut calculation masks an intricate valuation thinking process that, once unwound, illustrates how difficult it is to apply a given multiple to another business (Jay Schembs, 2014). 
Based on this context, we study the main economic and financial fundamentals that impact the EBITDA multiple variability in Belgium context. Our samples of 78 companies in 2014, 83 companies in 2015 and 85 companies in 2016 are completely formed in October 2017. Using the multiple linear regression model, the empirical analysis provides results that demonstrate the importance of theoretical value fundamentals such as Risk, Growth and Investment requirement, in selecting companies “peers” group and in evaluating company thanks to EBITDA multiple. The empirical analysis also emphasizes the differentiated effects of the theoretical value fundamentals, given above, on the enterprise value or on the EBITDA multiple value. 
This analysis shows that the differentiated effects of theoretical value fundamentals on the EBITDA multiple value are due to the instability of enterprises values and to the volatility of data year by year in each sample. The analysis shows also that the instability of enterprises values and the volatility of data are impacted by the evolving investor feelings and the differentiated behaviours of the agents involved in the transaction as explained by Finalysis news (2014). Focused on all these reasons, the results allow us to retain for greater accuracy that it would be better to use the linear regression model and draw conclusions at the precise moment of the firm evaluation. More specifically, stabilizing a mathematical formula derived from the regression model requires to study to what extent the addition of a variable reflecting investors’ feelings would lead to a more reliable prediction model over time.

EBITDA - Enterprise value - EBITDA multiple - Systemic risk - company reinvestment requirement - company growth rate --- Sciences économiques & de gestion > Finance

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Reverse stress tests can be a useful tool to evaluate bank resilience to a credit shock, especially in environments where financial data are limited or opaque. This paper develops a simple and transparent country-level banking sector resilience indicator that focuses on tail risks, the Consolidated Distance to Breakpoint. Based on individual bank reverse stress test results, this novel metric quantifies the increase in nonperforming loans needed to deplete capital buffers for a subset of the most fragile banks that collectively represent at least 20 percent of total banking system assets, a level commonly associated with a systemic banking crisis. The paper calculates the Consolidated Distance to Breakpoint using public data for more than 1,500 banks in 59 emerging market and developing economies during the COVID-19 pandemic. The paper explores the value added of this metric in relation to widely used country-level macro-financial and soundness indicators. The results show that the association of the Consolidated Distance to Breakpoint with these macro-financial and financial soundness indicators is limited. This suggests that this new indicator encapsulates complementary information, possibly because aggregate measures may obscure challenges in individual banks. As such, the Consolidated Distance to Breakpoint metric could serve as a useful input to establish a basic understanding of a banking sector's resilience.

Bank Capital --- Banking System --- Early Warning Systems --- Finance and Financial Sector Development --- Financial Crisis Management and Restructuring --- Financial Regulation and Supervision --- Financial Stability --- Systemic Risk

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For an international sample of banks, the authors construct measures of a bank's absolute size and its systemic size defined as size relative to the national economy. They examine how a bank's risk and return, its activity mix and funding strategy, and the extent to which it faces market discipline depend on both size measures. Although absolute size presents banks with a trade-off between risk and return, systemic size is an unmitigated bad, reducing return without a reduction in risk. Despite too-big-to-fail subsidies, the analysis finds that systemically large banks are subject to greater market discipline as evidenced by a higher sensitivity of their funding costs to risk proxies, suggesting that they are often too big to save. The finding that a bank's interest cost tends to rise with its systemic size can also in part explain why a bank's rate of return on assets tends to decline with systemic size. Overall, the results cast doubt on the need to have systemically large banks. Bank growth has not been in the interest of bank shareholders in small countries, and it is not clear whether those in larger countries have benefited. Although market discipline through increasing funding costs should keep systemic size in check, clearly it has not been effective in preventing the emergence of such banks in the first place. Inadequate corporate governance structures at banks seem to have enabled managers to pursue high-growth strategies at the expense of shareholders, providing support for greater government regulation.

Access to Finance --- Bank Size --- Bankruptcy and Resolution of Financial Distress --- Banks & Banking Reform --- Debt Markets --- Economic Theory & Research --- Finance and Financial Sector Development --- Market Discipline --- Systemic Risk

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This article reviews the European Systematic Risk Board (ESRB), its role, approach, outputs, and effects in the European Union. The ESRB is the reason for macroprudential oversight of financial systems. Macroprudential policy is used to identify and reduce financial risks and limit financial imbalances. This policy is for both upturns and downturns of economic cycles. The role of the ESRB should be further enhanced to cover the entire financial system and institutions.

International finance --- Financial institutions, International --- International monetary system --- International money --- Finance --- International economic relations --- Law and legislation --- Law and legislation. --- Finance: General --- Macroeconomics --- General Financial Markets: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Systemic risk --- Macroprudential policy --- Financial sector stability --- Macroprudential policy instruments --- Systemic risk assessment --- Financial sector policy and analysis --- Financial risk management --- Economic policy --- Financial services industry --- Norway