Fri, 03/07/2015
The Czech financial sector’s already high resilience to potential adverse shocks has strengthened, as reported by the Czech National Bank (CNB). Banks increased their capital adequacy and liquidity and are comfortably compliant with the new European regulatory rules, according to the Financial Stability Report 2014/2015. The main risk scenario for the financial sector is still a renewed recession leading to a fall in profitability.
- The resilience of the Czech financial sector to potential adverse shocks has improved
- The risk of excessive growth in lending remains low and the countercyclical capital buffer rate therefore remains at zero
- A recovery in demand for loans, a fall in interest rates and an easing of credit standards represent potential sources of risks to financial stability in the future
- The CNB is preventively introducing a set of recommendations for the provision of loans for house purchase
- The CNB has prepared a new methodology for reviewing and assessing the risk of systemic concentration of sovereign exposures
- According to stress tests, banks and insurance companies remain highly resilient to adverse scenarios, while pension management companies are showing greater sensitivity to interest rate risk.
Contact:
Jana Bašeová, Relationship Manager
Global Securities Services Czech Republic
jana.baseova@unicreditgroup.cz