Financial Stability Review 2/2006

Financial Stability Review, November 2006

CONTENTS

SUMMARY
Macroeconomic and external environment
Corporate financial behaviour and risks
Financial behaviour of households and related risks
Banking market
Securities market and other financial intermediaries
Payment systems
Conclusions and financial stability risks
I GLOBAL ECONOMY AND ESTONIAN ECONOMY
EXTERNAL ENVIRONMENT
Global economic cycle
International financial markets
ESTONIAN ECONOMIC GROWTH AND MACROECONOMIC RISKS
Economic growth, external balance and inflation
Corporate business situation
Confidence
Industrial sales
New companies and bankruptcies
Corporate investment and economic indicators
Economic situation of households
Confidence and household budget surveys
Labour market
Wages
II FINANCIAL BEHAVIOUR OF COMPANIES AND HOUSEHOLDS AND THEIR RISKS
COMPANIES
Financial position and saving
Corporate debt
Real estate financing by domestic banks
HOUSEHOLDS
Financial position and saving
Real estate investments as savings
Household debt and loan-servicing capability
Level and growth of debt
Housing loans
Consumer credits
DOES THE INCREASE IN REAL ESTATE PRICES AFFECT PRIVATE CONSUMPTION?
Households' loan-servicing capability and risks
ASSESSING THE DEVELOPMENT OF THE FINANCIAL SECTOR AND FINANCIAL DEEPENING
III BANKING SECTOR STABILITY AND RISKS
Strategic development of the banking sarket
Quality of assets
Capital adequacy
CAPITALISATION OF BANKS
Liquidity
Funding of banks
Liquid assets
Efficiency and profitability
IV MONEY AND SECURITIES AND MONEY MARKET
Money market
Bond market
Stock market
V OTHER FINANCIAL MARKETS
Investment funds
Pension funds and insurance
Life insurance
Non-life insurance
VI PAYMENT SYSTEMS
Settlement system of interbank payments
Payment intermediation
Payment environment
Payments via credit institutions
Use of payment cards
Assessment by the overseer of the payment systems

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