Eba stress test results
Template Guidance. The aim of such tests is to assess the resilience of financial institutions to adverse market developments, as well as to contribute to the overall assessment of systemic risk in the EU financial system. One of the responsibilities of the European Banking Authority EBA is to ensure the orderly functioning and integrity of financial markets and the stability of the financial system in the EU.
To this end, the EBA is mandated to monitor and assess market developments as well as to identify trends, potential risks and vulnerabilities stemming from the micro-prudential level. The severe nature of the adverse scenario reflects a deliberate choice and reflects the purpose of the stress test exercise, which is to assess the resilience of the European banking system to a hypothetical severely deteriorated macro-environment.
One of the primary supervisory tools to conduct such an analysis is the EU-wide stress test exercise. The methodology and templates cover all relevant risk areas and have considered the feedback received from industry. The adverse scenario is based on a narrative of hypothetical heightened geopolitical tensions, with high inflation and higher interest rates having strong adverse effects on private consumption and investments, both domestically and globally.
This is a first step of revising the EU-wide stress test framework towards a hybrid bottom-up and top-down approach. The methodology covers all risk areas and builds on the one prepared for the EU-wide stress test. The results will be published by the end of July The European Banking Authority EBA published today its EU-wide stress test draft methodology, templates and template guidance, which will be discussed with the industry.
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In terms of GDP decline, the adverse scenario is the most severe used in the EU wide stress up to now. Methodological note. As a new feature, the projections on net fee and commission income NFCI will be based on a top-down model. This is in line with the decision to aim for a biennial exercise. Corrigednum table.
The stress test exercise will be launched in January with the publication of the macroeconomic scenarios. This decision has been communicated to the European Parliament, the Council, and the Commission.
Macro financial scenario PDF - corrigendum updated 1 March Macro financial scenario Excel - corrigendum updated 1 March Macro financial scenario PDF. Macro financial scenario Excel. Real GVA by sector Excel. Macro financial scenario PDF - corrigendum updated 20 March Macro financial scenario Excel - corrigendum updated 20 March Market risk scenario PDF.
Market risk scenario Excel. Some aspects of the methodology have been improved based on the lessons from the exercise.
Methodology PDF. Template Guidance PDF. Templates Excel. Templates Guidance. Also, the sample coverage has been increased.
Stress tests 2023
The adverse scenario is characterised by severe negative shocks to economic growth, higher unemployment combined with higher interest rates and credit spreads. An additional 26 banks have been added to the stress test sample compared to the exercise and further proportionality has been introduced into the methodology. The individual bank results promote market discipline and are used as part of the EU supervisory decision-making process.
In , the EBA will perform its regular annual transparency exercise.
Stress tests - European Banking Authority
The EBA expects to publish the results of the exercise at the end of July The European Banking Authority EBA published today the final methodology, draft templates and template guidance for the EU-wide stress test along with the milestone dates for the exercise. This stress test allows supervisors to assess the resilience of EU banks over a three-year horizon under both a baseline and an adverse scenario.
This section is dedicated to the EBA EU-wide stress tests and provides information about the methodologies and the scenarios used, as well as any additional supporting information released by the EBA during the conduct of the exercise.