While both these publications represent a significant step forward in the area of
financial sector surveillance, there is some room for further improvement. Both reports do a good job in presenting overall assessment of financial sector trends, but some refinements could be considered to the content of these reports. More specifically, consideration could be given to significantly streamlining the presentation of both reports (which are now both well over 100 pages long) by sharpening the focus of the FSR on major risks and strengths/vulnerabilities of the Slovak financial system, while the RRSFSA could be centered around the analysis of structural developments and financial soundness indicators. The frequency of publication of these reports may also be revisited, with a more
analytical FSR being published on an annual basis, while a more data-oriented RRSFSA remaining on a semi-annual or even quarterly basis.
The payment system architecture, which has received high marks in the 2002
FSAP assessment, has seen further improvements. These include further strengthening of the NBS’s oversight framework, development of the real time gross settlement subsystem, and intraday liquidity support. The NBS took over the operational responsibility for the Slovakia Interbank Payment Systems to ensure smooth, efficient, and safe operations. Another important initiative was to set national standards and integrate the national infrastructure related to electronic payment instruments. Credit card users in Slovakia are now able to use the shared network of automated teller machines, which has a potential to greatly facilitate integration in the single Europe payment area.
Further changes are under way to facilitate integration of Slovakia into the EU
framework. The NBS has made significant progress in preparations to join the TARGET 2 real time gross settlement systems of the ECB by mid-2008. Another major initiative is an active participation in the Single Europe Payments Area Project (SEPA). The NBS is in the
process of developing a national strategy for joining SEPA, which is expected to be completed by early 2007.
Systemic Liquidity Management and Safety Nets
The modalities of liquidity management are similar to those in place at the time
of the 2002 FSAP. The banking system remains very liquid, due in part to the NBS’s sterilized purchases of capital inflows. As a result, the alternative channels of liquidity management (money and securities markets) have grown since 2002 but are still not very active or liquid.