Montenegro: Financial Sector Assessment Program—Banking Sector Stress Testing—Technical Note
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Summary:
The FSAP stress testing exercise was conducted in an environment of low profitability and low credit growth. These trends cause vulnerabilities in the banking system due to low margins to absorb costs or losses. While GDP growth of 3.2 percent is projected for Montenegro under the baseline scenario, the stress test recognized the great uncertainty around growth estimates for the economy and tested the banking system’s resilience to extreme, yet plausible economic shocks.
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