CNB stress tests confirm resilience of banking sector
The results of the CNB’s macro-stress tests confirm that the Czech banking sector is sufficiently resilient to potential adverse shocks.
The results of stress tests of the Czech banking sector performed using data available as of the end of September 2017 showed 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 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.
Marek Zeman
Director, CNB Communications Division
- Results of the stress tests of the banking sector (pdf, 68 kB)
- Results of the stress tests of the banking sector – underlying data (xls, 803 kB)
Notes for journalists:
The CNB uses stress testing as a tool for assessing the resilience of financial institutions registered in the Czech Republic and of the financial system as a whole. The CNB applies both a top-down macro/aggregate approach and a bottom-up individual/micro approach to stress testing. Macro-stress tests assess the resilience of the banking sector as a whole.
The scenarios for the individual stress tests are prepared by the CNB. The stress testing methodology is regularly revised and published in the CNB’s Financial Stability Reports, mostly in the form of thematic articles or boxes. The stress tests are conducted at a regular frequency, usually yearly or half-yearly.