The Liechtenstein financial sector is in a stable condition despite the coronavirus crisis. The Financial Stability Council came to this conclusion following its assessment of the current landscape.

At its meeting on Monday, the Financial Stability Council (FSC) of Liechtenstein examined the current economic landscape in addition to developments on the international financial markets over recent weeks against the backdrop of the coronavirus crisis. While the crisis is hitting the real economy, the Liechtenstein financial sector continues to be in a stable condition, a press release issued by the Government of Liechtenstein states. The banking sector in Liechtenstein is very large in comparison with other countries. The press release states that the solvency and liquidity indicators here are significantly above average. During a stress scenario, these would act as absorption buffers to deliver a very positive impact on the resistance and stability of the sector.
The Financial Market Authority Liechtenstein (FMA) and the government of Liechtenstein will, however, continue to monitor the situation further, the press release explains. To this end, they will keep in close contact with financial market stakeholders.
In the wake of its quarterly assessment, the FSC recommended further that the counter-cyclical capital buffer should be kept at 0 percent of risk-weighted assets. The counter-cyclical capital buffer is a tool used to mitigate the effects of excessive growth in lending.

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