The Central Bank of the Republic of Kosovo (CBK) published today the 13th edition of the Financial Stability Report (FSR), a document that is published twice a year. The special feature of this edition of the FSR is the advancement in content and quality in the light of ensuring the primary objective of CBK, which is the maintenance of financial stability by identifying and assessing the risks posed to the financial system and its infrastructure.
The report aims not only to inform the public on the position of financial stability in the country, but also to foster a professional debate regarding the developments and challenges of the financial system of the country and its accompanying infrastructure.
Subsequently, in the second half of 2017, the major developments affecting the financial stability were favourable, and thus the financial system continued to be characterized with high sustainability. The banking sector continues to be characterized with high stability, assessed on the basis of the level of performance and financial health indicators. The aggregate risk index of the banking sector has declined compared to the previous year, which was mainly caused by the decline of credit risk. The results of stress-test analysis suggest the banking sector's high ability to face possible shock in credit and liquidity portfolio under the assumption of moderate hypothetical scenarios, as well as more aggravated scenarios. Similarly, other components of the financial system, such as the pension and microfinance sector and the insurance sector, were characterized with increased activity and improved financial performance, and also the health indicators of these sectors are at satisfactory levels. Expectations for 2018 are as follows: the economic growth will accelerate, thus creating favourable conditions for continuation of the growth of sustainable lending and support for the stability of profitability and capitalization of the banking sector. Additional information regarding all of the aforementioned developments is presented in the Report, which is published on the official website of the Central Bank of the Republic of Kosovo and can be obtained at the following link https://bqk-kos.org/repository/docs/2018/BQK_FSR_13.pdf .