Today Fitch Ratings has issued a new report on system risks of the banking system. Over the last six months, on the whole, a certain reduction in the system banking risks has been observed, Trend reports referring to the message spread by the International Rating Agency Fitch Ratings.
We have observed a significant increase in stability in twelve banking systems, and the number of countries with the highest category of risk has reduced from 45 down to 40 ( totally 81 systems are being observed). At the same time, the rapid growth in the volumes of crediting remains being a factor of anxiety in a number of countries, and can trigger worsening the situation within the coming six months, Richard Fox, Senior Director in the Fitch Analytic Group for Sovereign Rating.
The indicator of the banking system Fitch ("BSI"), which is used for estimation of the quality, or the stability in the internal situation of the banking system, has improved on 12 countries.
Among countries with developed economy, Spain and Switzerland have passed to the BSI highest category A. Austria and Germany has also changed their places to a higher category B, which corresponds to the intense and high-qualified banking system. 90 per cent of the banking systems with developed economy are in the two highest categories now. Japan has also improved its position and climbed one level up (BSI C).
The strengthening of banking systems has also been observed in developing markets.
The number of systems in the category BSI "B", which is at the same level with such typical banking systems of developed countries, has reached 9. Bahrain, Czech Republic, Mexico, and Qatar have joined the group.
Besides, Brazil, Latvia, and Oman have changed their positions to a higher category BSI "C". At the same time, more than a half of the banking systems of developing markets are referred to the unstable category (BSI "D"), and 20 per cent more to the category of very unstable (BSI "E").
The macro-prudential risk is possible when an excessive growth of crediting is accompanied with a significant raise in the actives` prices, or a real strengthening of the exchange rate that is usually a prerequisite of system problems.
Such risks indicating by the macro-pridential indicator ("MPI"), has increased to a some extent since February 2006. Five countries: Austria, Czech republic, India, Slovakia, and Slovenia have changed their positions to the category of moderate risk (MPI "2"). At the same time, Malta and Norway have changed their positions to categories of a less risk; the latter is in the category MPI "3" now.
No country has been referred to the highest category MPI "3", which includes five countries now: Azerbaijan, Iceland, Ireland, Russia, and South Africa.
Fitch estimates on the macro-prudential risk was prepared in the report published a year before in February 2006. The reports for the first time included data for 2005. The estimates cited in the new report remains based on the data over last three years prior to 2005, and indicates the possibility of tensity in the banking system for a three-year forecasted period, as a rule.