Cyprus: Financial Sector Assessment Program Update: Technical Note: Measuring Banking Stability in Cyprus

International Monetary Fund

No 2009/171, IMF Staff Country Reports from International Monetary Fund

Abstract: Various indicators place Cyprus’s banking system soundness ahead of emerging countries but behind advanced economies. This report discusses financial sector stability in Cyprus, using a combination of accounting-based and market-based indicators, and stress tests. Cypriot commercial banks are weaker than their counterparts in Greece and also less stable than cooperative banks in Cyprus. Credit risk appears as the main source of risk in the banking sector, with demand for real estate slowing, declining property price growth as well as Cyprus’s high household indebtedness.

Keywords: ISCR; CR; Cypriot bank; banking system; default probability; financial crisis; asset quality; banks well.; credit risk; trading portfolio; return on assets; return on equity; Cypriot banking sector; bank stocks; Cypriot bank DDs respond; Cypriot market; Commercial banks; Stress testing; Loans; Financial sector stability; Europe; Global; Eastern Europe (search for similar items in EconPapers)
Pages: 67
Date: 2009-06-01
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