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IMF: home price, credit growth, spillovers from Nordic banks are key risks to Lithuania

BC, Vilnius, 26.06.2018.Print version
The International Monetary Fund (IMF) sees rapid growth in housing prices and credit, and spillovers through Nordic parent banks as the main risks to Lithuania's banking system, informs LETA/BNS.

The potential risks are identified in a report prepared by an IMF staff team that worked in Lithuania in May and approved by the fund's Executive Board, the central Bank of Lithuania said on Tuesday.


The IMF experts think that Lithuania's financial stability indicators remain strong and its banking system is well capitalized.


"The IMF report notes that in recent years, the number of transactions in the real estate market rose substantially and neared the pre-crisis peak. Housing prices, especially in major urban centers, also followed an upward trend. Nonetheless, the level of corporate and household indebtedness is still modest," the central bank said in a press release. 


According to the report, there are no signs of financial imbalances emerging in Lithuania. It also notes that "increasing reliance of Nordic subsidiaries on domestic funding is a positive development limiting funding risks from adverse developments in Nordic countries".  


Lithuania joined the IMF in 1992.






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