Stress-resistant banks

Tue, 02/01/2018

Recent stress tests confirm the resilience of the Czech banking sector. By Tomas Vacha, Senior Relationship Manager, GSS Czech Republic.


The results of the Czech National Bank’s macro stress tests show that the Czech banking sector is sufficiently resilient to potential adverse shocks. The tests revealed that the capitalisation of the banking sector as a whole would remain well above the 8% regulatory minimum even in a highly adverse scenario.

The adverse scenario assumes a sharp decrease in economic activity both in the Czech Republic and abroad. The sector’s resilience is based mainly on its capital adequacy ratio, which stood at 18.4% as of 30 September 2017, and on its current profitability.

The Czech National Bank regularly conducts stress tests to assess the impacts of highly adverse future economic scenarios on the domestic banking sector. The current examination used data available as of the end of September 2017.