Deutsche Bundesbank and BaFin launched the fourth stress test to assess the earnings and resilience of small and medium-size banks (also known as less significant institutions or LSIs). The LSI Stress Test 2019 involves about 1,400 banks and savings banks that are under direct national supervision in Germany. Parallel to the LSI survey, a stress test will be conducted at all German building societies, taking into account the business model of these specialized institutions.
Concurrent to the stress test, the German supervisory authority is interviewing selected institutions on the risks arising from real estate financing and on the development of lending standards in the corporate lending business. From a prudential point of view, the survey is necessary to improve the short-term data situation in these areas. The data collected in the stress test must be made available by the end of May 2019. For real estate financing and lending standard surveys, a submission is scheduled for mid-July 2019. Bundesbank and BaFin will publish the results in Autumn 2019.
Related Link (in German): Press Release
Keywords: Europe, Germany, Banking, Stress Testing, Less Significant Institutions, Bundesbank, BaFin