Cyprus: Financial Sector Assessment Program Update: Technical Note: Measuring Banking Stability in Cyprus
June 1, 2009
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Various indicators place Cyprus’s banking system soundness ahead of emerging countries but behind advanced economies. This report discusses financial sector stability in Cyprus, using a combination of accounting-based and market-based indicators, and stress tests. Cypriot commercial banks are weaker than their counterparts in Greece and also less stable than cooperative banks in Cyprus. Credit risk appears as the main source of risk in the banking sector, with demand for real estate slowing, declining property price growth as well as Cyprus’s high household indebtedness.
Subject: Banking, Commercial banks, Cooperative banks, Financial crises, Financial institutions, Financial sector policy and analysis, Financial sector stability, Loans, Stock markets, Stress testing
Keywords: asset quality, bank stocks, banking system, banks well., Commercial banks, CR, credit risk, Cypriot bank, Cypriot bank DDs respond, Cypriot banking sector, Cypriot market, default probability, Eastern Europe, Europe, financial crisis, Financial sector stability, Global, ISCR, Loans, return on assets, return on equity, Stress testing, trading portfolio
Pages:
67
Volume:
2009
DOI:
Issue:
171
Series:
Country Report No. 2009/171
Stock No:
1CYPEA2009005
ISBN:
9781451809961
ISSN:
1934-7685
