NBU launches a new tool for financial system risks assessment and monitoring - the Survey on Systemic Risks in the Financial Sector. The key objective of the survey is to assess the current systemic risks and the level of confidence in the stability of the Ukrainian financial system of financial market participants. The NBU will conduct a survey to more effectively perform one of its key functions - ensuring financial stability. The use of such a tool is a common practice among the central banks of developed countries, such as the United Kingdom or Sweden.
The NBU’s survey covers banking institutions, insurance and investment companies. The questionnaire is answered directly by the heads of institutions. A wide range of respondents will provide a high quality of identification of the risks of the Ukrainian financial system and will allow analyzing the state of the financial system as a whole.
In the long run, the survey results may be of interest to other financial market regulators to quickly identify current and potential risks.
The NBU will conduct the Survey on Systemic Risks in the Financial Sector and publish its results twice a year. In the first issue of the survey conducted in May 2018, 23 respondents with the largest share of the market participated (15 banks, 4 insurance companies, 4 investment companies). The sample of respondents did not include the legal entities under sanctions. In the case of several representatives of one financial group among the market leaders, the questionnaire was sent to one of them.
According to the survey, the majority of respondents believe the current state of the financial sector of Ukraine is satisfactory (64% of all responses). The share of respondents assessing the current financial sector standing as bad (23% of respondents) was a bit higher than the share of optimists (14%).
Almost half of respondents indicated improvement in the financial sector over the past 6 months, although 10% believe it has worsened. Some 35% of respondents expect the financial sector standing to improve in the next six months, although 13% of respondents have the opposite opinion. Almost half of respondents do not see any changes in the state of the financial sector, and do not expect them to happen in the near future.
The respondents consider the overall level of risk in the Ukrainian financial sector to be medium (48%) or high (43%), and only 9% - low. Respondents consider corruption, activities of law enforcement agencies and of judicial system to be the main sources of risk for Ukraine`s financial system.
Top five sources of instability include the political and social situation in Ukraine, the state of cooperation with international financial institutions,the state of protection of creditor and investor rights, as well as fraud and cyber threats.
For the details of the survey please, visit Systemic Risk Survey in the Publications section.
The next survey on the financial sector’s systemic risks will be published in November 2018.
For reference
The results of the survey are not weighed on the market share - each response is considered as equivalent.
The presented results are based on respondents` responses and may deviate from the NBU’s assessment of the financial system risks.