LJUBLJANA (dpa-AFX) - Central bank governors of North Macedonia and Slovenia have expressed confidence that various macroprudential measures have strengthened the financial system stability.
Measures such as the countercyclical capital buffer helped to build the banking system resilience against economic challenges and preserve financial stability in an environment dominated by uncertainties, the two central bank governors said following their meeting in Skopje, according to a release posted on the National Bank of North Macedonia website on Monday.
'Capital adequacy, as the main parameter of the banking system stability, currently stands at around 19 percent, hitting the record high in the last 16 years, along with the stable and solid liquidity and the good credit portfolio quality,' National Bank Governor Angelovska Bezhoska said. 'This shows that the banking system has the capacity to provide support for economic growth, investment in particular.'
'Banks in the euro area and Slovenia have been performing very well recently, achieving high profitability ratios similar to those of North Macedonian banks, along with historically favorable asset quality indicators,' Bank of Slovenia Governor Boštjan Vasle said. 'Banks are generally well capitalized and maintain solid liquidity.'
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The favorable position of banks reflects the strengthening and unification of banking regulation and supervision in Eurozone, enhancements to macroprudential policy frameworks, and significant support from monetary and fiscal policies during the pandemic and the energy crisis, Vasle said.
However, European banks face longer-term challenges related to their business models, digitalization, and increasing competition from nonbanks', the Bank of Slovenia chief cautioned.
Both central bankers also pointed out that there are risks and uncertainties mainly associated with the external environment and the impact of the geopolitical turmoil and geoeconomic fragmentation, and that central banks remain prudent in pursuing macroprudential policies, as a support for strengthening financial stability in the period ahead.
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