Featured Product

    ECB Concludes Comprehensive Assessment of Six Bulgarian Banks

    July 26, 2019

    ECB published the results of a comprehensive assessment of six Bulgarian banks, following a request by Bulgaria to establish close cooperation between ECB and the Bulgarian National Bank. The assessed banks are UniCredit Bulbank AD, DSK Bank EAD, United Bulgarian Bank AD, First Investment Bank AD, Central Cooperative Bank AD, and Investbank AD. The cut-off date for the exercise was December 31, 2018. Four of the assessed banks did not face capital shortfalls while First Investment Bank AD and Investbank AD fell below the 8% CET1 ratio threshold in the baseline scenario of the stress test.

    A comprehensive assessment is required as part of the process of establishing close cooperation between ECB and the national competent authority of an EU member state whose currency is not euro. The exercise comprised an Asset Quality Review (AQR) and a stress test, both of which were based on the methodologies applied by ECB Banking Supervision in its regular comprehensive assessments of banks that have recently been classified as significant or could potentially become significant. The assessment identified the need to further strengthen capital positions of the banks using the same threshold ratios that had been applied in previous comprehensive assessments, including a common equity tier 1 (CET1) ratio of 8% for the AQR and the baseline scenario of the stress test, along with a CET1 ratio of 5.5% for the adverse scenario in the stress test. 

    Four of the six banks covered in the assessment—UniCredit Bulbank AD, DSK Bank EAD, United Bulgarian Bank AD, and Central Cooperative Bank AD—do not face any capital shortfalls, as they did not fall below the relevant thresholds used in AQR and the stress test. First Investment Bank AD, however, fell below the 8% CET1 ratio threshold for AQR and the stress test’s baseline scenario; the bank also fell below the 5.5% CET1 ratio threshold used in the adverse scenario of the stress test. Meanwhile, Investbank AD fell below both the 8% CET1 ratio threshold used in the stress test’s baseline scenario and the 5.5% CET1 ratio threshold used in the stress test’s adverse scenario.

    AQR is a prudential exercise, rather than an accounting exercise, and provides ECB with a point-in-time assessment of the carrying values of banks’ assets on a particular date, which for this exercise is December 31, 2018. The AQR for the Bulgarian banks was performed on the basis of the updated AQR methodology, which the ECB published in June 2018 and takes account of the impact of accounting standard IFRS 9. The AQR was complemented by a stress test exercise, which looked at how the capital positions of banks would evolve under the hypothetical baseline and adverse scenarios over the next three years (2019-21). The stress test was conducted using the methodology applied in the 2018 stress test of EBA. 


    Related Links

    Keywords: Europe, EU, Bulgaria, Banking, Asset Quality Review, Stress Testing, CET 1, SSM, Banking Supervision, ECB

    Featured Experts
    Related Articles
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116