EBA published templates for the 2020 EU-wide stress tests, post the feedback received by banks during the testing phase. Though the official version of the templates has been circulated to banks participating in the 2020 EU-wide stress test, the current version can still be subject to minor technical adjustments before its final publication in January 2020. The stress test exercise will be formally launched in January 2020 and the results of the exercise will be published by July 31, 2020.
After an agreement of the EBA Board of Supervisors on publication of the 2020 EU-wide stress test package, the templates were submitted to banks for a testing phase. During this period, EBA collected industry feedback and implemented further adjustments to the version of templates that was published in November. This updated version is for information only and banks shall refrain from using it for the purpose of the exercise.
Similar to the 2018 exercise, the 2020 EU-wide stress test is a bottom-up exercise with constraints, including a static balance sheet assumption. The exercise is primarily focused on the assessment of the impact of risk drivers on the solvency of banks. Banks are required to stress test a common set of risks: credit risk, including securitization; market risk and counterparty credit risk; and operational risk, including conduct risk. Banks are requested to project the impact of the scenarios on net interest income and to stress profit and loss (P&L) and capital items not covered by other risk types.
Keywords: Europe, EU, Banking, Stress Testing, Templates, EU-Wide Stress Test, 2020 Stress Test, EBA
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