This paper reports on Bangladesh's Financial System Stability Assessment. Considerable progress has been made in strengthening the resilience of the country's financial sector. Total assets of the banking sector have increased twofold since 2003, and credit to the private sector has risen threefold. Loan classification, provisioning, and even capital remain uneven in the banking sector, creating potential vulnerabilities. The rapid growth in nontraditional banking activities is generating new risks, underlining the importance of strengthening the regulatory framework.