Financial Institution Security Measures in Liechtenstein Get Green Light from Regulators

Stable Financial Sector in Liechtenstein Despite Global Risks

Regulators in Liechtenstein have given a thumbs up to the country’s financial sector, declaring it “sound and stable” despite increased global risks and vulnerabilities. The assessment comes as part of the Financial Market Authority (FMA) 2022 Financial Stability Report.

Key Findings from the FMA Report

• The banking sector in Liechtenstein has performed well with no significant concerns identified by the FMA.
• Systemic risks are assessed to be limited, according to the report.
• However, analysts have highlighted some potential areas for improvement:
  • Debt servicing capacity
  • Risks associated with climate change and digitalization

Recommendations from Regulators

To mitigate these risks, financial institutions and authorities have been urged to take proactive measures:

• Strengthen structural efficiency among banks
• Maintain a reasonable level of profitability and solvency among insurance companies
• Secure sustainable coverage ratios for pension schemes

Preparing for Potential Negative Scenarios

Government authorities have also been advised to proceed with accession negotiations with the International Monetary Fund (IMF) as part of efforts to prepare for potential negative extreme scenarios.

Conclusion

While there are some areas for improvement, Liechtenstein’s financial sector remains resilient in the face of global uncertainty. By taking proactive steps to address identified risks, regulators and financial institutions can work together to ensure continued stability and growth in the country’s financial markets.