Germany: Financial Sector Assessment Program-Technical Note-Stress Testing, Interconnectedness, and Risk Analysis

August 16, 2022

Preview Citation

Format: Chicago

Germany: Financial Sector Assessment Program-Technical Note-Stress Testing, Interconnectedness, and Risk Analysis, (USA: International Monetary Fund, 2022) accessed September 18, 2024

Summary

The financial sector weathered COVID relatively well on the back of high pre-crisis capital and liquidity buffers, strong public and private sector balance sheets, and unprecedented public and ECB support. Immediate risks to Germany’s financial stability of Russia’s invasion of Ukraine appear to be manageable due to the banks’ limited direct exposures to Russia. However, risks associated with the economic fallout could impact some individual financial institutions, non-performing loans, and house prices. Real GDP growth was projected to regain momentum from mid-2022 onwards, but the war could hinder the recovery through supply constraints, higher-than-expected above-target inflation (with higher energy prices and supply constraints), a tightening of financial conditions, and shifts in investors’ confidence.

Subject: Asset and liability management, Commercial banks, Cooperative banks, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, International organization, Liquidity, Liquidity requirements, Monetary policy, Stress testing

Keywords: Building and loan association, Cash flow, Commercial banks, Cooperative banks, ECB support, FSAP solvency, Global, Hurdle rate, Liquidity, Liquidity requirements, Stress testing, Swap line

Publication Details

Pages:

104
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2022/272
Stock No:

1DEUEA2022009
ISBN:

9798400218019
ISSN:

1934-7685

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