Analytics, Baltic States – CIS, Banks, Economics, Financial Services, Lithuania
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Friday, 26.04.2024, 01:49
Geopolitical tensions remain key risk for Lithuanian banks
However, new risk sources, not mentioned in earlier surveys, have been identified in the latest survey.
"The Russia-Ukraine conflict has been regarded as the most important risk source for the country's financial system for more than a year now," Simonas Krepsta, director of the central bank's Financial Stability Department, said in a press release.
"However, with tensions in the East subsiding, financial institutions also identified other events that could adversely affect the financial system, such as a flare-up of the migrant crisis in Europe and China's economic slowdown," he added.
Geopolitical tensions in the East and related economic sanctions continue to be perceived as the most important risk, but the probability of this risk occurring and its potential impact on the financial system are rated as being lower than half a year ago.
It is the exacerbation of the migrant crisis in Europe, not the Russia-Ukraine conflict, that is named in the latest survey as the most likely event to have an adverse impact on the country's financial system in the near future, although its impact would likely be indirect.
Other key risk sources identified in the latest survey include continuing low interest rates and decreased risk premiums in the financial markets.
The risk of cyber crimes is also perceived by respondents, especially by banks, as being among the key ones.
The country's financial institutions are the least concerned about loan and property bubble risks.
The Bank of Lithuania carries out risk surveys twice a year.