{
  "title": "Bulgaria: Financial Sector Assessment Program: Technical Note-Risk Assessment and Stress Test of the Banking System",
  "publication": "IMF Staff Country Reports, July 11, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2017/07/11/bulgaria-financial-sector-assessment-program-technical-note-risk-assessment-and-stress-test-45058",
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  "summary": "This Technical Note discusses results of risk assessment and stress tests (ST) of the banking system in Bulgaria. ST results reveal that the Bulgarian banking system is vulnerable to the extreme realization of internal and external risks coupled with the need to clean the balance sheets from nonperforming loans (NPLs). In the baseline scenario, characterized by a modest economic growth and decline in unemployment, as well as stable and low interest rates, two banks—including a systemic one—exhibit weakness in terms of capital buffers to cope with accumulated losses in the past. These banks also experience substantial increase in their NPLs as a result of the asset quality review adjustment.",
  "publishDate": "2017-07-11",
  "series": "IMF Staff Country Reports",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- The Technical Note discusses results of risk assessment and stress tests (ST) of the banking system in Bulgaria.\n- ST results reveal that the Bulgarian banking system is vulnerable to the extreme realization of internal and external risks coupled with the need to clean the balance sheets from nonperforming loans (NPLs).\n- In the baseline scenario, two banks—including a systemic one—exhibit weakness in terms of capital buffers to cope with accumulated losses in the past.\n- These banks also experience substantial increase in their NPLs as a result of the asset quality review adjustment."
    },
    {
      "heading": "Baseline scenario assumptions (as described)",
      "content": "- Modest economic growth.\n- Decline in unemployment.\n- Stable and low interest rates."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Banking, Commercial banks, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Liquidity requirements, Loans, Nonperforming loans, Stress testing\n- Keywords: AQR finding, bank, bank capital, banks experiences shortfall, capital, cash flow, Commercial banks, CR, domestics bank, Europe, funding shock, Global, ing bank N.V., interest rate, ISCR, Liquidity requirements, loan, Loans, Nonperforming loans, performing loan portfolio, quality data, Stress testing\n\nInternational Monetary Fund. Monetary and Capital Markets Department \"Bulgaria: Financial Sector Assessment Program: Technical Note-Risk Assessment and Stress Test of the Banking System\", IMF Staff Country Reports 2017, 200 (2017).\n\n---\n\n Content in this bundle\n\n- Country Report\n  - Country Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Country Report (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/cr/issues/2017/07/11/bulgaria-financial-sector-assessment-program-technical-note-risk-assessment-and-stress-test-45058"
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    "Published: July 11, 2017",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781484308448.002",
    "The Technical Note discusses results of risk assessment and stress tests (ST) of the banking system in Bulgaria.",
    "ST results reveal that the Bulgarian banking system is vulnerable to the extreme realization of internal and external risks coupled with the need to clean the balance sheets from nonperforming loans (NPLs).",
    "In the baseline scenario, two banks—including a systemic one—exhibit weakness in terms of capital buffers to cope with accumulated losses in the past.",
    "These banks also experience substantial increase in their NPLs as a result of the asset quality review adjustment.",
    "Modest economic growth.",
    "Decline in unemployment.",
    "Stable and low interest rates.",
    "Subject: Banking, Commercial banks, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Liquidity requirements, Loans, Nonperforming loans, Stress testing",
    "Keywords: AQR finding, bank, bank capital, banks experiences shortfall, capital, cash flow, Commercial banks, CR, domestics bank, Europe, funding shock, Global, ing bank N.V., interest rate, ISCR, Liquidity requirements, loan, Loans, Nonperforming loans, performing loan portfolio, quality data, Stress testing",
    "**Country Report**"
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