Assessments of the financial sector’s resilience to high-impact adverse events have remained high for a year now, the November 2023 Systemic Risk Survey shows. More than 90% of respondents assessed the financial sector’s resilience as average or above average.
For the second straight time, respondents in the survey improved their assessments of the financial sector’s current standing. More than half of respondents rated the sector’s condition as good or very good, while only 6% described it as bad.
Half of respondents reported an improvement in the financial sector’s performance over the past six months. No respondents said it has deteriorated.
Assessments of the general level of risk in the financial sector have been slowly improving. The percentage of respondents who regard this risk as high or very high has decreased to 50% from 58%. About half of respondents consider the risk level to be average.
Financial institutions’ appetite for risk has notably risen over the past six months. This was reported by almost 40% of respondents (the largest share since the survey began).
Despite the positive trends, financial institutions’ expectations for the next six months have noticeably worsened. The share of respondents who expect financial sector conditions to deteriorate has increased to 32%, up from 3% in May, while the number of respondents who anticipate positive changes has declined.
The war with russia has been the source of the highest risk since the onset of the full-scale invasion. The risks that have landed in the top five include those of foreign capital inflows (for the first time since May 2022) and of the quality of legislation and the tax system (for the first time since November 2019).
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 poll 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.
The survey was conducted between 9 and 24 November 2023 with the participation of managers of 22 banks, 10 insurers, and 3 investment companies. Financial institutions under special economic measures and other restrictions (sanctions) have not been surveyed. Final 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.