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The European Banking Authority (EBA) published today its sixth semi-annual report on risks and vulnerabilities of the EU banking sector. The report highlights that throughout 2014, European banks have continued to take advantage of favourable market conditions to raise capital in preparation for the asset quality reviews (AQR) and the 2014 EU-wide stress test. The average common equity tier 1 (CET1) ratio for the largest European banks reached 11.8 % in June 2014, the highest level since 2009 and broadly in line with the largest US banks. The report informs that market sentiment and confidence is improving. However, it also warns that the signs of recovery remain modest and fragile and that weak macroeconomic conditions can further affect credit quality. The heavy debt overhang, the potential impact of conduct-related issues, and the sustainability of business models and profitability remain sources of concerns.

The EBA has published its final draft Regulatory Technical Standards (RTS) and Implementing Technical Standards (ITS) on the functioning of the colleges of supervisors in the EU. These technical standards on colleges detail the conditions for the establishment and functioning of colleges of supervisors, and assist the interaction and cooperation between the consolidating supervisor and the relevant competent authorities. They also detail how colleges' supervisory activities should be planned and performed in both going concern and emergency situations.

The European Banking Authority (EBA) published today its final Guidelines for common procedures and methodologies for the supervisory review and evaluation process (SREP). These Guidelines represent a major step forward in forging a consistent supervisory culture across the Single Market and provide a common framework for the work of supervisors in the assessment of risks to banks' business models, their solvency and liquidity. These Guidelines will be a key component of the EU Single Rulebook, which aims at improving the functioning of the internal market, including a sound, effective and consistent level of regulation and supervision in the banking sector.

The European Banking Authority (EBA) published today an Opinion addressed to the Danish FSA following its proposal of a partial waiver from the application of Article 129 (1)(c) of the Capital Requirements Regulation (CRR), which specifies the conditions for the eligibility of covered bonds in relation to risk weight preferential treatment. The EBA is of the opinion that given the significant potential concentration problems in Denmark, the application of a partial waiver is adequately justified.