EU-wide stress testing

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.

EBA's role in stress testing

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.

One of the primary supervisory tools to conduct such an analysis is the EU-wide stress test exercise. The EBA Regulation gives the Authority powers to initiate and coordinate the EU-wide stress tests, in cooperation with the European Systemic Risk Board (ESRB). 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.

The EBA's EU-wide stress tests are conducted in a bottom-up fashion, using consistent methodologies, scenarios and key assumptions developed in cooperation with the ESRB, the European Central Bank (ECB) and the European Commission (EC).

Stress tests 2021

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    EBA publishes the results of its 2021 EU-wide stress test

    The European Banking Authority (EBA) published today the results of its 2021 EU-wide stress test, which involved 50 banks from 15 EU and EEA countries, covering 70% of the EU banking sector assets. This exercise allows to assess, in a consistent way, the resilience of EU banks over a three-year horizon under both a baseline and an adverse scenario, which is characterised by severe shocks taking into account the impact of the pandemic. The individual bank results promote market discipline and are an input into the supervisory decision-making process. The adverse scenario has an impact of 485 bps on banks’ CET1 fully loaded capital ratio (497 bps on a transitional basis), leading to a 10.2% CET1 capital ratio at the end of 2023 (10.3% on a transitional basis).

    30/07/2021

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    EBA launches 2021 EU-wide stress test exercise

    The European Banking Authority (EBA) launched today the 2021 EU-wide stress test and released the macroeconomic scenarios. Following the postponement of the 2020 exercise, due to the COVID-19 pandemic, this year’s EU-wide stress test will provide valuable input for assessing the resilience of the European banking sector. Accordingly, the adverse scenario is based on a narrative of a prolonged COVID-19 scenario in a ‘lower for longer’ interest rate environment, in which negative confidence shocks would prolong the economic contraction. The EBA expects to publish the results of the exercise by 31 July 2021.

    29/01/2021

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    EBA announces timing for the launch of its 2021 EU-wide stress test exercise

    The European Banking Authority (EBA) will launch its 2021 EU-wide stress test exercise with the publication of the macroeconomic scenarios on 29 January at 18:00 CET. The EBA expects to publish the results of the exercise by 31 July 2021.

    25/01/2021

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    EBA publishes the methodology for the 2021 EU-wide stress test

    The European Banking Authority (EBA) published today the final methodology, draft templates and template guidance for the 2021 EU-wide stress test along with the key milestones of the exercise. The methodology and templates include some targeted changes compared to the postponed 2020 exercise, such as the recognition of FX effects for certain P&L items, and the treatment of moratoria and public guarantees in relation to the current Covid-19 crisis. The stress test exercise will be launched in January 2021 with the publication of the macroeconomic scenarios and the results published by 31 July 2021.

    13/11/2020

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    EBA updates on 2021 EU-wide stress test timeline, sample and potential future changes to its framework

    The Board of Supervisors (BoS) of the European Banking Authority (EBA) agreed on the tentative timeline and sample of the 2021 EU-wide stress test. The exercise is expected to be launched at the end of January 2021 and its results to be published at the end of July 2021.

    30/07/2020

In this section you can find the main documents of the 2021 EU-wide stress test. On 13 November 2020 the European Banking Authority published the final methodology, draft templates and template guidance for the 2021 EU-wide stress test. An updated version of the templates and template guidance, after the feedback provided by banks during the testing phase, is also available (18 December 2020 version). Please bear in mind that the current version of the templates and template guidance can still be subject to minor technical adjustments before its final publication in January 2021.

 

2021 EU-wide stress test results

The European Banking Authority (EBA) published the results of the 2021 EU-wide stress test of 50 banks.

The aim of the EU-wide stress test is to assess the resilience of EU banks to a common set of adverse economic developments in order to identify potential risks, inform supervisory decisions and increase market discipline.

The EU-wide stress test is coordinated by the EBA and carried out in cooperation with the European Central Bank (ECB), the European Systemic Risk Board (ESRB), the European Commission (EC) and the Competent Authorities (CAs) from all relevant national jurisdictions.

 

Banks individual results

All you need to know about the 2021 EU-wide stress test

In this section you will find an infographic that will help you understand the 2021 EU-wide stress test