02344cas a2200241 a 4500 AALejournalIMF018673 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484369586 1934-7685 BD-DhAAL BD-DhAAL International Monetary Fund. Monetary and Capital Markets Department. Euro Area Policies : Financial Sector Assessment Program-Technical Note-Systemic Risk Analysis. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (94 pages) IMF Staff Country Reports <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This technical note consists of five chapters focusing on various aspects of systemic risk analysis across the euro area financial system. The chapters cover bank profitability, balance sheet- and market-based interconnected analysis, contingent claims analysis, and a brief discussion of data gaps in the nonbank, non-insurance (NBNI) financial sector. The ongoing economic recovery will support euro area bank profitability in general, but it is unlikely to resolve the structural challenges faced by the least profitable banks despite some recent improvements. This is important because persistently weak bank profitability is a systemic financial stability concern. Empirical analysis of 109 major euro area banks over 2007-2016 reveals that real GDP growth and the NPL ratio are the most reliable determinants of profitability, after accounting for other factors. Although higher growth would raise profits, a large swath of banks with the weakest profitability would most likely continue to struggle even with a robust recovery. Therefore, banks should take advantage of the current upswing by resolutely addressing their NPL stocks-such a strategy holds the most promise for weak banks' profitability prospects. Mode of access: Internet IMF Staff Country Reports; Country Report ; No. 2018/231 Full text available on IMF http://elibrary.imf.org/view/journals/002/2018/231/002.2018.issue-231-en.xml IMF e-Library