According to Fitch RatingsÕ semi-annual report on banking risk, systemic risk in a number of markets increased over the last six months. Over 40% of sovereigns now show either moderate or high vulnerability to potential system stress, increasing the risk of a breakdown. In central and eastern Europe the proportion is 75%. Russia and Azerbaijan moved to the highest vulnerability category due to a combination of rapid credit growth and appreciation of real exchange rates. Fitch moved the countries to the weakest segments: D3 and E3 respectively of the agencyÕs System Risk Matrix.
Fitch: banking system vulnerability increases in Russia