EBA publishes peer review on the implementation of the stress testing guidelines
12 November 2013
The European Banking Authority (EBA) published today the peer review on the implementation of the EBA guidelines on stress testing . The aim of the peer review was to assess and compare the effectiveness of the supervisory activities related to the review of credit institutions' own stress testing frameworks across the EU, as well as the implementation of related provisions by competent authorities. The report shows that National Competent Authorities (NCAs) largely comply with the three assessed guidelines (18, 19 and 20).
Key features of the peer review work and main findings
In line with its mandate to assess the degree of convergence to the EBA guidelines, the EBA selected the guidelines on stress testing to perform a peer review analysis given the special emphasis placed on this topic by NCAs over the last couple of years.
The peer review work focused on methods and examples of best practice, and covered (i) stress testing governance structures and their use, (ii) possible methodologies including the appropriate severity of scenarios and potential mitigating measures during stressed conditions, and (iii) the overall impact of risk on institutions.
The following conclusions emerged from the peer review and in particular from on-site visits performed by the EBA:
Peer reviews are conducted in accordance with the provisions of Article 30 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 (‘the EBA Regulation') and the EBA decision establishing the Review Panel.