Financial Institutions, for Two Years in a Row, Improve Their Assessments of Financial Sector’s Resilience to Shocks – Systemic Risk Survey
For two years running, managers of banks and non-bank financial institutions have improved their assessments of the financial sector’s resilience to high-impact adverse events.
This is according to the May 2024 Systemic Risk Survey.
About 95% of respondents assessed the financial sector’s resilience to shocks as average or higher.
Meanwhile, the total balance of responses, for 12 months in a row, has been the highest since the survey was launched in 2018.
The percentage of respondents who regard financial sector risk as high or very high has declined to 41%, down from 50%.
Over half of those surveyed referred to the overall level of risk as medium.
About 45% of financial institutions’ top managers described the sector’s current state as good or very good.
Two thirds of the respondents said they expected no deterioration in the financial sector’s state over the next six months.
The war with russia continued to be regarded as the major source of risks in the financial sector.
The top five risks included risks related to foreign capital inflows, the performance of law enforcement agencies and the judicial system, fraud and cyber threats, as well as the risk of human capital quality in the financial sector.
The latter risk, which was ranked among the top five risks for the first time in the history of the survey, was reported to have increased noticeably.
Financial institutions’ appetite for risk has once again edged higher over the past six months, according to the survey.
Background
Conducted by the NBU twice a year, the Systemic Risk Survey looks into how the largest banks and non-bank financial institutions perceive existing and potential risks to the financial sector.
The survey reflects how financial institutions’ top managers assess the financial sector’s performance over the past six months and what they expect in the next six months.
This survey was conducted between 7 May and 21 May 2024 with the participation of managers of 22 banks, 10 insurers, and two investment companies.
Financial institutions under special economic measures and other restrictions (sanctions) were not surveyed.
Final results were calculated by assigning equal weights to each survey response, regardless of the size or market share of the bank/company.
The results presented in the survey are based on respondents’ opinions and do not necessarily reflect the NBU’s assessment of financial system risks
