Analysis and assessment of financial stability

Financial stability analysis at Eesti Pank is a two-stage process.

  1. Fundamental analysis of the financial system, which covers the main areas of risk and identifies possible systemic risks and also includes forecasts for developments in the banking sector
  2. Risk assessment, which follows the analysis and covers various stress tests and sensitivity analyses, which are important for assessment of how strong the financial system would be if any of the identified risks were to materialise

Eesti Pank's financial stability analysis is broadly-based, running the range from financial markets, institutions and infrastructure, especially settlement systems and payment environments, to the financial behaviour and risks of businesses and households. As the Estonian financial system is heavily focused on its banks, the analysis centres on risks that threaten the operation of the banking sector.

Eesti Pank's main financial stability analysis is released twice a year in the Financial Stability Review. The central bank uses this to assess financial stability and discuss policy measures.