EBA risk assessment shows improvements in EU banks solvency, profitability and liquidity, but asset price corrections remain a key threat
The European Banking Authority (EBA) published today its annual risk assessment of the European banking system. The report is accompanied by the publication of the 2021 EU-wide transparency exercise, which provides detailed information, in a comparable and accessible format, for 120 banks across 25 EEA / EU countries. Fears about potential asset quality deterioration have not materialised, except for the sectors most affected by the pandemic. Looking ahead, banks as well as micro and macro prudential authorities need to be prepared in case of a deterioration in the economic outlook or in case inflationary pressure translates into further rising rates.