Preliminary assessments show that, on aggregate, potential unrealised losses on bonds held at amortised cost are limited. But to gain further insights into this risk, we – together with the EBA – are using the ongoing stress test to collect data on these portfolios. The prospect of higher funding costs also increases the downside risks to bank earnings.
As the previous analysis shows, sustenance of the growth momentum would hinge upon the continued progress in public finances, enhanced role of the private corporate sector and further deepening of the financial sector to boost household financial savings.