The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This paper presents a financial system stability assessment update for the Czech Republic. The financial system is confronted with a number of growing risks. Owing to a high reliance of the Czech economy on exports to European Union (EU) countries, the main risk stems from negative developments in EU countries. The results of stress tests show that Czech banks can withstand substantial shocks. The paper reports that the regulatory and supervisory framework for financial institutions is generally sound, although inadequate resources are a major weakness.