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 2023

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    EBA publishes the results of its 2023 EU-wide stress test

    The European Banking Authority (EBA) today published the results of its 2023 EU-wide stress test, which involved 70 banks from 16 EU and EEA countries, covering 75% of the EU banking sector assets. 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. The adverse scenario is characterised by severe negative shocks to economic growth, higher unemployment combined with higher interest rates and credit spreads. In terms of GDP decline, the 2023 adverse scenario is the most severe used in the EU wide stress up to now. The individual bank results promote market discipline and are used as part of the EU supervisory decision-making process.

    28/07/2023

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    EBA announces date and time of the publication of the 2023 EU-wide stress test results

    The European Banking Authority (EBA) announced today that the results of the 2023 EU-wide stress test, including individual results for participating banks, will be published on Friday, 28 July 2023 at 18:00 CEST.

    21/07/2023

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    EBA launches 2023 EU-wide stress test exercise

    The European Banking Authority (EBA) launched today the 2023 EU-wide stress test and released the macroeconomic scenarios. This year’s EU-wide stress test is designed to provide valuable input for assessing the resilience of the European banking sector in the current uncertain and changing macroeconomic environment. 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. In terms of GDP decline, the 2023 adverse scenario is the most severe used in the EU wide stress up to now. 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. The EBA expects to publish the results of the exercise at the end of July 2023.

    31/01/2023

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    EBA publishes methodology and draft templates for the 2023 EU-wide stress test

    The European Banking Authority (EBA) published today the final methodology, draft templates and template guidance for the 2023 EU-wide stress test along with the milestone dates for the exercise. The methodology and templates cover all relevant risk areas and have considered the feedback received from industry. The stress test exercise will be launched in January 2023 with the publication of the macroeconomic scenarios. The results will be published by the end of July 2023.

    04/11/2022

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    EBA launches discussion on 2023 EU-wide stress test methodology

    The European Banking Authority (EBA) published today its 2023 EU-wide stress test draft methodology, templates and template guidance, which will be discussed with the industry. The methodology covers all risk areas and builds on the one prepared for the 2021 EU-wide stress test. Some aspects of the methodology have been improved based on the lessons from the 2021 exercise. As a new feature, the projections on net fee and commission income (NFCI) will be based on a top-down model. This is a first step of revising the EU-wide stress test framework towards a hybrid (bottom-up and top-down) approach. Also, the sample coverage has been increased. An additional 26 banks have been added to the stress test sample compared to the 2021 exercise and further proportionality has been introduced into the methodology. The 2023 exercise will assess EU banks' resilience to an adverse economic shock and inform the 2023 Supervisory Review and Evaluation Process (SREP).

    21/07/2022

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    EBA will run its next EU-wide stress test in 2023

    On 8 December 2021, the Board of Supervisors of the European Banking Authority (EBA) decided to carry out its next EU-wide stress test in 2023. This is in line with the decision to aim for a biennial exercise. This decision has been communicated to the European Parliament, the Council, and the Commission.  In 2022, the EBA will perform its regular annual transparency exercise.

    17/12/2021

 

 

2023 EU-wide stress test results

The European Banking Authority (EBA) published the results of the 2023 EU-wide stress test of 70 banks from 16 EU and EEA countries, representing about 75% of EU banks’ total assets. The exercise has been 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.

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 exercise is not designed as a pass-fail test but as a supervisory tool and an input for the Pillar 2 assessment of banks.

The EBA published the granular bank results, including detailed information at the starting and end point of the exercise, under both the baseline and the adverse scenarios. Dissemination of data is an integral element of the stress test exercise and it helps to foster market discipline. The transparency templates of the 2023 EU-wide stress test also include information on Pillar 2 Requirements (P2R) for each bank at the end of 2022, the stress test starting point.

 

Banks individual results

All you need to know about the 2023 EU-wide stress test