An analysis of financial stability indicates that the overall exposure of the financial system to systemic risks in 2018 and early-2019 remains unchanged and the financial system is stable, HNB said in a statement after a session of the HNB Council on Tuesday. The central bank said that while structural vulnerabilities of the economy decreased because of the continued reduction of structural imbalances and favorable economic developments, growing uncertainties on global financial markets, as well as those relating to geopolitical and trade tensions, increased the impact of risks from the international environment. HNB said that since businesses and households are increasingly borrowing at fixed interest rates and in the domestic currency, their interest rate and currency risks, as well as associated risks to banks, continued to decrease. It noted that the favorable macroeconomic developments and the implementation of the national program of subsidized housing loans has led to a rise in mortgage lending and a recovery of the real estate market, while despite this growth real estate prices remained markedly below peak levels recorded in 2008. At the same time, household lending through non-purpose cash loans was much stronger and under much less stringent terms than housing loans. According to the HNB, the banking system remains highly capitalized and liquid, the quality of the credit portfolio continues to improve, as does profitability. Moreover, the overall resilience of the banking system to possible shocks is maintained at a relatively high level. In that regard, the HNB did not change capital buffer requirements for credit institutions in 2018 and early 2019, the statement reads.