Featured Product

    ESRB Publishes Quarterly Risk Dashboard in June 2019

    July 04, 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

    Keywords: Europe, EU, Banking, Insurance, Securities, Systemic Risk, Risk Dashboard, ESRB

    Featured Experts
    Related Articles
    News

    PRA Revises Branch Return and Updates Guidance for Regulatory Reports

    PRA published the policy statement PS17/19, which contains the final policy related to changes in the format and content of the Branch Return Form and reporting guidance.

    September 12, 2019 WebPage Regulatory News
    News

    FINMA Outlines Treatment of Stablecoins in Supplement to Guide on ICO

    FINMA published a supplement to its initial coin offerings (ICOs) guidelines, outlining the treatment for stablecoins under the Swiss supervisory law.

    September 11, 2019 WebPage Regulatory News
    News

    Ursula von der Leyen Presents Structure of Next European Commission

    President-elect Ursula von der Leyen has presented her team and the new structure of the next European Commission.

    September 10, 2019 WebPage Regulatory News
    News

    FED Proposes to Revise and Extend Reporting Form on Systemic Risk

    FED proposed to extend for three years, with revision, the Banking Organization Systemic Risk Report (FR Y-15; OMB No. 7100-0352).

    September 10, 2019 WebPage Regulatory News
    News

    EBA Issues Revised List of Validation Rules for Reporting

    EBA published the revised list of validation rules (version 2.9) in its implementing technical standards on supervisory reporting.

    September 10, 2019 WebPage Regulatory News
    News

    Bundesbank Publishes Supplementary Validation Rules for Reporting

    Bundesbank published the updated document containing supplementary validation rules in the context of the implementation of the reporting system at national level.

    September 10, 2019 WebPage Regulatory News
    News

    APRA Licenses Xinja Bank as Authorized Deposit-Taking Institution

    APRA granted Xinja Bank Limited a license to operate as an authorized deposit-taking institution without restrictions, under the Banking Act 1959.

    September 09, 2019 WebPage Regulatory News
    News

    FDIC Proposes Revisions to Regulations on Interest Rate Restrictions

    FDIC proposed revisions to its regulations covering interest rate restrictions that apply to less than well-capitalized insured depository institutions.

    September 09, 2019 WebPage Regulatory News
    News

    EBA Intends to Clarify End-Treatment of Grandfathered Instruments

    EBA announced its intention to clarify the prudential treatment applicable to own funds instruments at the end of the grandfathering period, which expires on December 31, 2021.

    September 09, 2019 WebPage Regulatory News
    News

    IMF Releases Reports on 2019 Article IV Consultation with Saudi Arabia

    IMF published its staff report and selected issues report in context of the 2019 Article IV consultation with Saudi Arabia.

    September 09, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3799