ESRB Publishes Quarterly Risk Dashboard in June 2019
ESRB released its quarterly risk dashboard at the ESRB Board meeting, which was held on June 27, 2019. The risk dashboard provides a set of quantitative and qualitative indicators of systemic risk in the financial system in EU. The overview note accompanying the risk dashboard summarizes the recent development of indicators and contains two annexes describing the methodology and the covered risk indicators.
The dashboard highlights that risks to EU financial stability remain a concern, as reflected by the market-based indicators of systemic stress in EU over the past quarter. The indicators of systemic stress increased during the second quarter of 2019. Meanwhile, the probability of simultaneous default by large and complex banking groups and EU sovereigns decreased in the second quarter of 2019. The banking sector resilience remained broadly stable while the pace of the reduction of non-performing loans (NPLs) slightly lost momentum. The median common equity tier 1 to risk-weighted assets ratio remained stable at 15.5% in the first quarter of 2019, with the highest capitalized banks reducing their capitalization. Moreover, the median ratio of NPLs to total gross loans and advances slightly increased, reaching 3.2% at the beginning of 2019, up from 2.9% at the end of 2018. Overall, ongoing supervisory and regulatory work needs to support the reduction of vulnerabilities in the European banking sector. The dashboard also shows that, despite a lower profitability due to reduced investment returns, the median solvency ratio of the EU insurance sector is stable above 200%.
Additionally, at the ESRB meeting, the General Board considered the medium-term risks related to vulnerabilities in the residential real estate sector in European Economic Area. The General Board exchanged views on a range of systemic risks and vulnerabilities related to non-bank financial intermediation, including those related to interconnectedness, liquidity, and leverage. ESRB also plans to publish the EU Non-Bank Financial Intermediation Risk Monitor (previously Shadow Banking Monitor) in the coming months. Furthermore, the General Board discussed the key results from the ESRB workshop on the second-round effects from the banking sector stress test. For a better understanding of second-round effects, the General Board decided to supplement the 2018 EBA EU-wide banking sector stress test with a questionnaire. The questionnaire was sent to the 30 largest banking groups in Europe and aggregate results were discussed with representatives from participating banks.
Related Links
- Press Release
- Risk Dashboard (PDF)
- Overview Note (PDF)
- Annex I on Methodology (PDF)
- Annex II on Description of Indicators (PDF)
Keywords: Europe, EU, Banking, Insurance, Securities, Systemic Risk, Risk Dashboard, ESRB
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Blake Coules
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
EBA Single Rulebook Q&A: Third Update for January 2019Related Articles
BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
EBA Examines Remuneration Data and Use of Large Exposure Exemptions
The European Banking Authority (EBA) published a report that examines the use of certain exemptions included in the large exposures regime under the Capital Requirements Regulation (CRR).
BoE Issues Update on Ongoing Data Transformation Program
The Bank of England (BoE) issued a communication to firms to provide an update on the progress of the joint data transformation program—which is being led by BoE, the Financial Conduct Authority (FCA), and the industry—for the financial sector in UK.
EBA Issues Draft Methodology and Templates for 2023 Stress Tests
The European Banking Authority (EBA) published the draft methodology, templates, and template guidance for the European Union-wide stress test in 2023.
EBA Issues SREP Guidelines and Standards for Investment Firms
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) jointly published the final guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) for investment firms.
BoE and PRA Publish Regulatory Updates for Financial Sector Entities
The Prudential Regulatory Authority (PRA) proposed expectations, via CP8/22, in respect of changes to the instruments or claims that comprise unvested deferred sums awarded to material risk-takers as part of their variable pay.
EIOPA Issues Taxonomy for Solvency II Reporting, Issues Other Updates
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.7.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
OSFI Updates Address BCAR Reporting, Basel Reforms, and Cyber Risk
The Office of the Superintendent of Financial Institutions (OSFI) updated the 2023 Basel Capital Adequacy Reporting (BCAR) manual as well as the 2023 BCAR return.
FSB Report Outlines Progress on Climate Risk Roadmap
In a letter to the G20 Leaders, ahead of the July 2022 meeting, the Financial Stability Board (FSB) Chair set out an overview of the key work done by FSB.
SRB Issues Resolvability Assessment and Bail-in Implementation Guide
The Single Resolution Board (SRB) published its resolvability assessment and "heat map" for 2021, updated the operational guidance on implementation of bail-in tool, and issued the annual report for 2021.