Russian Federation Financial Sector Assessment Program : Stress Testing
This note presents the methodology and results of stress tests of the financial sector carried out as part of the 2016 Financial Sector Assessment Program (FSAP) for the Russian Federation. The stress tests focused on banks, reflecting the structur...
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| Format: | Report |
| Language: | English |
| Published: |
Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/358801511171000822/Russian-Federation-Financial-sector-assessment-program-technical-note-stress-testing http://hdl.handle.net/10986/28978 |
| Summary: | This note presents the methodology and
results of stress tests of the financial sector carried out
as part of the 2016 Financial Sector Assessment Program
(FSAP) for the Russian Federation. The stress tests focused
on banks, reflecting the structure of the Russian financial
sector, which is relatively small and bank-dominated. The
stress tests showed that the banking system is likely to
need additional capital. Even in the baseline scenario,
certain banks will need new capital owing to low
profitability and increasing credit losses. The required
resources are higher in the stress scenarios, but remain
manageable. If public funds are needed for recapitalization,
there is sufficient fiscal space, provided that fiscal
policy remains prudent. Stress tests should be supplemented
by a granular and comprehensive review of banks’ asset
portfolios to gauge capitalization needs |
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