Bosnia and Herzegovina: Financial Sector Assessment Program-Banking Sector Stress Testing—Technical Note

Bosnia and Herzegovina: Financial Sector Assessment Program-Banking Sector Stress Testing—Technical Note
ISBN-10
1513513990
ISBN-13
9781513513997
Series
Bosnia and Herzegovina
Category
Business & Economics
Pages
50
Language
English
Published
2015-08-03
Publisher
International Monetary Fund
Author
International Monetary Fund. Monetary and Capital Markets Department

Description

This Technical Note discusses results of Banking Sector Stress Testing for Bosnia and Herzegovina (BiH). The stress tests focused on the banking system and covered all 27 banks operating in BiH. System-wide solvency and liquidity indicators appear broadly appropriate, but significant pockets of vulnerability remain. On the basis of the supervisory data used, stress tests suggest that aggregate stress losses, mainly related to increased provisions in the loan book, although non-negligible, remain broadly manageable. Similarly, system-wide liquidity ratios appear broadly adequate. Nevertheless, there are several banks within the system—mainly small domestically owned banks—with a wide range of significant vulnerabilities. These include, low liquidity ratios, large concentration risks, and round-trip cross-border exposures.

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