EBA notes a decrease in EU banks’ asset encumbrance ratio during 2022

• The EU banking sector’s asset encumbrance weighted average decreased during 2022 with a ratio at 25.8%, close to the average pre-pandemic levels.
• EU banks limited their reliance on central bank funding as they gradually repaid central bank facilities. Repurchase agreements were the major source of encumbrance followed by covered bonds.
• There has been an increase in the amount in the amount of unencumbered central bank eligible assets and collateral increased by more than EUR 700bn to EUR 5tn.

The European Banking Authority (EBA) published today its annual asset encumbrance Report. The Report highlights that banks have limited the use of central bank funding in 2022. As a result, the overall encumbrance ratio decreased by 3.3 percentage points in 2022 to 25.8%.

Notes to editors

Key indicators have been visualised in a dynamic way. To facilitate the navigation, here is the full list of key indicators that you can find in the graphs:

• Slide 1 Evolution of the encumbrance ratio of total assets and collateral received.
• Slide 2 Encumbrance ratio by country.
• Slide 3 Distribution of sources of encumbrance.

The figures included in the Asset Encumbrance Report are based on a sample of 162 banks as of December 2022, covering more than 80% of the EU/EEA banking sector by total assets.