Germany: Financial System Stability Assessment

Financial System Stability Assessment
READ MORE...
Volume/Issue: Volume 2022 Issue 231
Publication date: July 2022
ISBN: 9798400216886
$20.00
Add to Cart by clicking price of the language and format you'd like to purchase
Available Languages and Formats
paperback else
pdf else
epub else
English
Prices in red indicate formats that are not yet available but are forthcoming.
Also of interest
Summary

This paper reviews Germany’s Financial System Stability Assessment report. The financial sector has weathered the impact of the pandemic and the war in Ukraine relatively well so far, but risks remain elevated. The Financial System Assessment Program (FSAP) solvency stress tests show that the significant institutions and less significant institutions are overall resilient to an adverse scenario. The main risks to financial stability relate to a global resurgence of coronavirus disease 2019 with extended supply chain disruptions, a scarcity of gas and oil, and de-anchoring of inflation expectations in the United States and advanced Europe. Consistent with the authorities’ findings, the FSAP found small vulnerabilities from climate transition risks to the banking system. Macroprudential policy is being tightened but rising cyclical vulnerabilities will require additional action. Good progress had been made in strengthening the microprudential frameworks for banking and insurance since the 2016 FSAP. The system of Deposit Guarantee Schemes/Institutional Protection Schemes needs reform, which should be informed by a review of the distortions resulting from depositors’ high level of protection guaranteed under the current regime.