CNB unveils new financial stability publication

The CNB today released a new financial stability publication on its website. The report, called Risks to financial stability and their indicators, will be issued at the start of every calendar year to supplement the CNB’s main publication in this area, the Financial Stability Report, which it has published every June since 2005.

The Financial Stability Report is an underlying document for the spring Bank Board meeting on financial stability issues. For the similar autumn meeting, CNB experts regularly draw up an update of the Financial Stability Report. This update has not previously been published. Given the increasing public interest in macroprudential policy, the Bank Board has decided to publish the information contained in the update in a publication called Risks to financial stability and their indicators.

“I am sure the public will welcome the opportunity to get hold of detailed information about the evolution of risks to financial stability in our economy and about our macroprudential policy twice a year”, said CNB Governor Jiří Rusnok.

The new publication states, among other things, that the domestic financial sector remains highly resilient to adverse shocks. The favourable evolution of the domestic economy is having a positive effect on the activity and financial results of domestic financial institutions. However, the resilience of the financial sector has stopped strengthening due to stagnation of total bank capitalisation and a rise in market risks. Some sources of structural risk persist. These include concentration of banks’ exposures to the property market, increasing investment in foreign assets by financial institutions and a rise in the share of foreign currency assets on financial institutions’ balance sheets.

The publication also provides details on the reasons for the Bank Board’s December decision to raise the countercyclical capital buffer rate to 1.25% with effect from 1 January 2019. In addition, it contains information on banks’ compliance with the CNB’s recommendations regarding the provision of mortgage loans in the first half of last year.

Marek Zeman
Director, CNB Communications Division