Republic of Lithuania: Financial System Stability Assessment: Update

International Monetary Fund

No 2008/137, IMF Staff Country Reports from International Monetary Fund

Abstract: 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.

Keywords: ISCR; CR; bank; BoL; parent bank; capital base; IRB model; liquidity position; banking sector; presents challenge; entity basis; Stress testing; Pension spending; Credit risk; Commercial banks; Foreign banks; Global (search for similar items in EconPapers)
Pages: 52
Date: 2008-04-22
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Citations: View citations in EconPapers (3)

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