The Czech National Bank's stress tests of local banking and insurance companies showed that the country's financial services sector would be largely resilient if presented with impaired economic conditions.
For the first time the stress tests were aligned with the European Banking Authority's methodologies, the Czech central bank said Dec. 14.
The tests confirmed the banking sector's ability to retain capital amenities above the regulatory 8% even in the event of a decline in domestic and foreign economic activity.
The stress tests of the insurance sector revealed that companies were adequately capitalized and capable of handling significant risks.
The tests, which were carried out at the end of 2017, revealed an overall solvency ratio in the case of shocks to be 177% for Czech insurance companies, significantly higher than the regulatory minimum of 100%.