Republic of Estonia: Financial System Stability Assessment

International Monetary Fund

No 2009/089, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper presents key findings of the Financial System Stability Assessment of the Republic of Estonia. The Estonian financial sector is highly concentrated and foreign owned. Financial indicators suggest a sound banking sector, and show particular strength in asset quality and earnings. The paper reveals that the Estonian banking sector has significant vulnerabilities from its real-estate lending. The rapid expansion of the banking sector has been funded, to a large extent, by short-term foreign borrowing from parent banks, making Estonia vulnerable to a disruption in international financial markets.

Keywords: ISCR; CR; insolvent bank; bank need ELA.; BoE staff; bank license; exchange rate; parent bank; requiring bank; resolution technique; sensitivity analysis; foreign exchange; mortgage exposure; bank need ELA; credit risk; financial asset; bank supervision; Credit; Commercial banks; Loans; Stress testing; Nonperforming loans; Baltics; Global (search for similar items in EconPapers)
Pages: 42
Date: 2009-03-09
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