ECB to Stress Test 37 Banks Under the 2018 EU-Wide EBA Stress Test
The 2018 EU-wide stress test is being launched and ECB announced that it will examine 37 euro area banks as part of this exercise. EBA will coordinate the EU-wide exercise in cooperation with the ECB and national authorities.
In line with the EBA selection criteria, these banks, which are directly supervised by ECB, represent 70% of total euro area banking assets. The ECB list includes banks from ten euro area countries, including four Greek banks. The four Greek banks, directly supervised by ECB, will undergo the same stress test under the EBA scenario and methodology. However, to complete the test before the end of the third European Stability Mechanism stability support program for Greece, the timetable will be accelerated and the results are expected to be published in May.
The EU-wide stress test being launched now will be conducted according to the EBA methodology, templates, and scenarios. Results of individual banks are expected to be published by November 02, 2018. ECB will conduct its own stress test in parallel for the significant institutions that are not covered by the EU-wide EBA stress test. This, while consistent with EBA methodology, will also consider the smaller size and lower complexity of these institutions. Stress test results for all significant institutions will be used to assess the Pillar 2 capital needs of individual banks in the context of the Supervisory Review and Evaluation Process or SREP.
Related Link: Press Release
Keywords: Europe, EU, Banking, Stress Testing, 2018 EU Stress Testing, ECB
Featured Experts
Emil Lopez
Credit risk modeling advisor; IFRS 9 researcher; data quality and risk reporting manager
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Nihil Patel
Data scientist; SaaS product designer; credit portfolio analyst and product strategist; portfolio modeler; correlation researcher
Previous Article
IMF Reports on the 2017 Article IV Consultation with NorwayRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
