Cyprus: Financial Sector Assessment Program: Financial System Stability Assessment
IMF Staff Country Reports, November 3, 2009
Source details
- Canonical URL
- Cyprus: Financial Sector Assessment Program: Financial System Stability Assessment
Other formats
Bibliographic details
- Published: November 3, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451809985.002
Executive summary and key findings
- The banking system of Cyprus "managed to avoid the worst effects of the global financial crisis."
- Stress tests confirmed that "credit risk remains high."
- The assessment recommends that work on the "crisis contingency framework should be completed."
Main analysis points
- Stress testing and simulation exercises were used to assess resilience; results indicated elevated credit risk despite avoidance of the worst crisis outcomes.
- The assessment highlights the need for stronger contingency arrangements at both national and EU levels to address potential systemic stress.
Policy recommendations and ongoing initiatives
- Complete the crisis contingency framework.
- EU-wide and national initiatives already under way include:
- Strengthening deposit insurance.
- Drafting guidelines for emergency liquidity assistance.
- Adopting a legal framework for covered bonds to facilitate access to European Central Bank refinancing.
Subjects and technical scope
- Subject areas covered: Banking; Commercial banks; Cooperative banks; Financial institutions; Financial Sector Assessment Program; Financial sector policy and analysis; Loans; Stress testing.
- Keywords: bank; banking sector; central bank; Commercial banks; Cooperative banks; CR; Cypriot authorities; Cypriot bank; Cyprus; EU accession; EU banking directive; EU member; Europe; Financial Sector Assessment Program; financial system; Global; ISCR; Loans; return on assets; simulation exercise; Stress testing.
Content in this bundle
- Cyprus — Financial System Stability Assessment