The Central Bank of the Republic of San Marino published a position paper, “Challenges and Opportunities for San Marino’s Financial System”, updating its 2019 analysis by extending the scope to the entire financial system and presenting an integrated view of macroeconomic, public finance and supervised-sector developments. It links recent progress in the banking sector to implementation of the Financial System Strategy and supervisory action, and sets forward priorities centred on resolving residual critical issues and achieving full alignment with the European regulatory framework. The paper describes the banking sector as having good liquidity and capitalisation, adequate profitability, governance aligned with best European standards, and materially improved capitalisation and asset quality. It also sets out strategic directions and policy recommendations for institutions and market participants aimed at consolidating achievements and preparing for opportunities associated with the European integration pathway and a more competitive environment.