Mario Gassner shared some good news on Monday. Unveiling the Financial Stability Report 2018, the chairman of the FMA executive board said that “Liechtenstein’s financial sector is positive and stable, with relatively limited risks”.
While the financial sector represents a large portion of the overall economy, it focuses on “a comparatively conservative business model, a stable shareholder structure, high capitalization and strong liquidity and profitability indicators”. Non-credit institutions in the sector, such as insurers, asset managers and investment funds, played a relatively small role despite strong increases.
The report highlighted that as a small, open economy, Liechtenstein relies on safeguarding this stability in the long-term. According to the summary, this also concerns cautious growth strategies among the banks, which “must not take any undue risk and must maintain high capitalization”.
Against the background of the stable economy however, private household debt represents 127 per cent of the gross domestic product. The report attributed this high figure to high levels of disposable income in the country, but also called for “cautious monitoring of the associated risks in the banking sector”. At the same time, it said, the “solid and sensible approach to fiscal policy must continue”.
In his speech, Prime Minister Adrian Hasler said the government had commissioned the creation of a committee for financial market stability that alongside the annual report would make “a significant contribution to securing the future of the Liechtenstein financial centre – and consequently of the country itself”.