The Financial Stability Report (FSR) provides an overview of the potential risks to financial stability in the country, always in function of securing CBK's prime goal, maintaining financial stability through 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 increase transparency and promote a professional debate on the developments and challenges of the country's financial system and its infrastructure.
In 2018, the developments affecting financial stability were mainly favourable, causing the financial system to continue to be characterized by sustainability.
The banking sector continues to be characterized by high stability, based on the satisfactory levels of performance indicators and financial health.
The aggregate risk index of the banking sector has increased slightly compared to the previous year, mainly driven by the dynamics of the solvency risk.
The stress-test analysis results suggest high banking sector capacity to cope with potential shocks in loan and liquidity portfolio under the assumption of some moderate hypothetical scenarios, as well as the most severe scenarios.
The performance of other constituting sectors of the financial system was characterized by some unfavourable fluctuations, although they pose no risk to financial stability.
During 2018, the pension sector was characterized by slower growth of assets and negative return on investment due to the negative fluctuations in external financial markets, where this sector has high exposure.
The withdrawal from the market of one of life insurers in 2018 was reflected in the reduction of insurance sector assets. However, this sector also closed this year with a positive financial outcome.
Meanwhile, the microfinance sector was characterized by accelerated activity growth and high performance.
Expectations for 2019 are easier acceleration of economic growth, creating favourable conditions for continued growth of sustainable loaning and supporting the stability of the banking sector profitability and capitalization.