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Slovak Republic: Financial Sector Assessment Program-Technical Note on Systemic Risk Analysis and Stress Testing

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  • International Monetary Fund

Abstract

This technical note focuses on systemic risk analysis and stress testing as part of the Slovak Republic’s Financial Sector Assessment Program. The FSAP for the Slovak Republic implemented an extensive analysis of systemic risks and assessed the resilience of the banking sector. It identified key vulnerabilities and evaluated sectoral exposures, assessed corporate and household risks, and banking sector solvency and liquidity risks, and explored interconnectedness and contagion risks. FSAP bank solvency stress tests indicate that the Slovak banking system appears resilient to severe macrofinancial shocks. Liquidity stress tests reveal that Slovak banks exhibit strong resilience against funding and market liquidity shocks. Direct contagion risks within the financial sector, interbank market, and cross-border banking operations are assessed as relatively low. The intersectoral linkages analysis, based on the sectoral exposures in the Balance Sheet Approach, shows limited vulnerabilities for the financial system but highlights a large external funding of nonfinancial corporates primarily reflecting intra-group linkages. The domestic financial system interconnectedness analysis underscores very limited exposures, mainly from pensions to banks acting as depositories.

Suggested Citation

  • International Monetary Fund, 2025. "Slovak Republic: Financial Sector Assessment Program-Technical Note on Systemic Risk Analysis and Stress Testing," IMF Staff Country Reports 2025/088, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2025/088
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