Cover -- CONTENTS -- Glossary -- EXECUTIVE SUMMARY -- MACRO-FINANCIAL SETTING AND FINANCIAL SECTOR OVERVIEW -- A. Unbalanced Economic Growth and Financial Vulnerabilities -- B. Financial System Structure -- FINANCIAL SECTOR RISKS AND RESILIENCE: RECOVERY FROM THE CRISIS IS NOT YET COMPLETE -- A. Banking Sector -- B. Insurance and Pensions -- BOLSTERING THE FINANCIAL SAFETY NET -- A. Weak Systemic Liquidity Management in Normal Times -- B. Untested Crisis Management Framework -- C. Crisis Preparedness Framework -- DELINQUENCY MANAGEMENT AND RESOLUTION OF NPLS: SOLVING THE LEGACY PROBLEM -- A. Slow Progress Resolving NPLs -- B. A Multi-Track Approach to Resolve the NPLs Universe -- STRENGTHENING FINANCIAL SECTOR OVERSIGHT: AVOIDING ANOTHER SURGE IN BAD LOANS -- A. Bank Regulation: Achieving Better Implementation -- B. Insurance Sector: Stronger Prudential Requirements and Reinsurance Supervision -- C. NBK Management of Pensions: Sound Investment Practices are Key -- D. Securities Markets: Reducing Uncertainty and Mitigating Mispricing and Reputational Risks -- E. Financial Market Infrastructure: Addressing Gaps in Risk Management -- FIGURES -- 1. Distribution of Loans and NPLs -- 2. The Aftermath of the Crisis -- 3. Structure of the Financial System -- 4: Credit Real Growth -- 5. Dollarization and Wholesale Funding -- 6. Macrofinancial Baseline and Stress Scenarios -- 7. Scenario Solvency Risk Results -- 8. Solvency Risk: Sensitivity Analyses -- 9. Liquidity Risk: Scenario Analyses -- 10. Economic Developments -- 11. Banking Sector Developments -- 12. Capital Markets and Expected Default Frequencies -- 13. Monetary and External Sector Developments -- 14. Key Financial Soundness Indicators-Cross-Country Comparison -- TABLES -- 1. FSAP Key Recommendations -- 2. Selected Economic Indicators, 2010-2019 -- 3. Financial System Structure, 2005-13.

4. Financial Soundness Indicators of the Banking System, 2008-2013 -- 5. Financial Soundness Indicators of the Non-Banking System, 2005-2013 -- APPENDICES -- I. List of Recent Macroprudential Policy Measures -- II. Funded Pension System -- III. Risk Assessment Matrix -- IV. Macroeconomic Scenarios -- V. Report on the Observance of Standards and Codes: Basel Core Principles-Summary Assessment.