IMF Staff Country Reports

Republic of Lithuania: Financial System Stability Assessment: Update

April 22, 2008

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International Monetary Fund. Monetary and Capital Markets Department "Republic of Lithuania: Financial System Stability Assessment: Update", IMF Staff Country Reports 2008, 137 (2008), accessed November 23, 2024, https://doi.org/10.5089/9781451824162.002

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Summary

Lithuania’s catch-up toward the European average has been impressive. This success has been coupled with the emergence of macroeconomic imbalances. The dominance of foreign-owned banks in the banking system constitutes both a source of strength and risk. Although stress tests indicate that the banking system is reasonably resilient to macroeconomic shocks, existing capital buffers might not be sufficient to cope with low probability extreme events, and strengthening the capital would be advisable. The government implemented a regulatory framework for Nonbank Financial Institution (NBFI) and a pension reform.

Subject: Banking, Commercial banks, Credit risk, Expenditure, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Foreign banks, Pension spending, Stress testing

Keywords: Bank, Banking sector, BoL, Capital base, Commercial banks, CR, Credit risk, Entity basis, Foreign banks, Global, IRB model, ISCR, Liquidity position, Parent bank, Pension spending, Presents challenge, Stress testing

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