EBA to run its next EU-wide stress test in 2018

In its meeting on 6 December 2016, the Board of Supervisors of the European Banking Authority (EBA) decided to carry out its next EU-wide stress test in 2018, in line with its previous decision to aim for a biennial exercise. The EBA will start immediately to prepare the methodology for the 2018 stress test exercise, which will also include an assessment of the impact of IFRS 9, which will be implemented on 1 January 2018. This decision has been communicated to the European Parliament, the Council and the Commission.  In 2017, the EBA will perform its regular annual transparency exercise.

 

The decision to run the next EU-wide stress test in 2018 was driven by an acknowledgement of the ongoing progress that EU-banks are making in strengthening their capital positions. Competent Authorities as well as market participants will, in the meantime, use the significant quantitative and qualitative information generated by the 2016 EU-wide exercise.

 

Risks and vulnerabilities in the EU-banking sector will continue to be monitored by Competent Authorities and the EBA as part of their regular assessment of banks.

According to Article 22 of its Regulation, at least annually, the EBA shall consider whether it is appropriate to carry out EU-wide stress tests and inform the European Parliament, the Council and the Commission of the reasons behind its decision.

 

An EU-wide stress test assesses the resilience of financial institutions to adverse market developments, and contributes to the assessment of systemic risk in the EU financial system.