In its concluding statement following a staff visit in May, the International Monetary Fund also touched upon safeguarding financial stability:
“The financial system is resilient and well-regulated. Czech banks are self-financed with a low system-wide loan-to-deposit ratio and strong capital and liquidity buffers. Recent stress tests confirm that even extreme recessionary and deflationary scenarios would be manageable, mainly thanks to high initial capitalisation levels. The CNB has recently allocated more resources for on-site supervision, and started utilising the macroprudential toolkit of the CRD-IV by requiring an across-the-board “conservation buffer” supplemented by a “systemic buffer” targeted at the largest banks.
However, credit growth remains slow. This is despite the healthy financial sector and generally strong corporate and household balance sheets. On the corporate side, in addition to still-low investment levels, this slow growth appears to be due to the tendency of corporations to utilise internal resources for investment and, to a lesser extent, other financing sources such as corporate bonds, rather than problems with access to credit. Household credit growth has been stable at a slightly higher level.”
Contact:
Jana Bašeová,
Relationship Manager, Global Securities Services, Czech Republic
jana.baseova@unicreditgroup.cz