Executives of the largest banks and non-bank financial institutions have been improving their assessments of the financial sector’s resilience to high-impact adverse events for more than two years, the November 2024 Systemic Risk Survey shows. More than 97% of respondents assessed the resilience as medium or higher.
Around a half of respondents in the survey rated the financial sector’s current performance as good or very good. The balance of responses has remained at a high positive level for three consecutive rounds of the survey, that is since November 2023.
Most respondents reported no change in the financial sector’s performance over the last six months, and more than half of respondents do not expect any changes in the coming six months. However, the share of those who expect the financial sector’s performance to deteriorate slightly increased.
More than half of financial institutions’ top managers assessed the overall level of risk in the sector as medium or low, and 41% viewed it as high or very high. Thus, the overall level of risk in the financial sector is assessed as moderately high.
Since 2022, the war with russia has been the major source of risks in the financial sector. The top five risks also include those related to law enforcement bodies and the judiciary, the overall level of corruption, the quality of legislation and the tax system (moved up on list the most), and human capital quality risk (got into the top five for the second time in a row).
Financial institutions' appetite for risk has edged higher over the past six months. At the same time, most respondents reported no change in their risk appetite.
Conducted by the NBU twice a year, the Systemic Risk Survey looks into how the largest banks and non-bank financial institutions perceive existing and potential risks to the financial sector. The survey reflects how financial institutions’ top managers assess the financial sector’s performance over the past six months and what they expect in the next six months.
This survey was conducted between 7 November and 22 November 2024 with the participation of executives of 22 banks, 10 insurance companies, and 2 investment firms. Summary results were calculated by assigning equal weights to each survey response, regardless of the size or market share of the bank/company.
The results presented in the survey are based on respondents’ opinions and do not necessarily reflect the NBU’s assessment of financial system risks.