Republic of Estonia: Financial System Stability Assessment
March 9, 2009
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This paper presents key findings of the Financial System Stability Assessment of the Republic of Estonia. The Estonian financial sector is highly concentrated and foreign owned. Financial indicators suggest a sound banking sector, and show particular strength in asset quality and earnings. The paper reveals that the Estonian banking sector has significant vulnerabilities from its real-estate lending. The rapid expansion of the banking sector has been funded, to a large extent, by short-term foreign borrowing from parent banks, making Estonia vulnerable to a disruption in international financial markets.
Subject: Banking, Commercial banks, Credit, Financial institutions, Financial sector policy and analysis, Loans, Money, Nonperforming loans, Pension spending, Stress testing
Keywords: Baltics, bank license, bank need ELA, bank need ELA., bank supervision, BoE staff, Commercial banks, CR, Credit, credit risk, exchange rate, financial asset, foreign exchange, Global, insolvent bank, ISCR, Loans, mortgage exposure, Nonperforming loans, parent bank, requiring bank, resolution technique, sensitivity analysis, Stress testing
Pages:
42
Volume:
2009
DOI:
Issue:
089
Series:
Country Report No. 2009/089
Stock No:
1ESTEA2009003
ISBN:
9781451812565
ISSN:
1934-7685
