Featured Product

    EBA Releases Spring 2020 Transparency Exercise Data on Banks in EU

    June 08, 2020

    EBA published bank-by-bank data from the seventh transparency exercise in EU. This additional data disclosure comes as a response to the outbreak of COVID-19 and provides market participants with bank-level data as of December 31, 2019, prior to the start of the crisis. Along with the data set, EBA also provided a document highlighting the key statistics derived from the data set and a wide range of interactive tools that allow users to compare and visualize data by using maps at a country and a bank-by-bank level. The data confirm that the banking sector in EU entered the crisis with solid capital positions and improved asset quality, but also shows the significant dispersion across banks.

    In the context of an unprecedented health crisis, EU-wide transparency data confirms banks entered this challenging period in a stronger position than in previous crises. Compared with the Global Financial Crisis in 2008-2009, banks now hold larger capital and liquidity buffers. EU banks reported increasing capital ratios in 2019. The EU weighted-average common equity tier 1 (CET1) fully loaded capital ratio was at 14.8% as of the fourth quarter of 2019, nearly 40 bps higher than in the third quarter of 2019. The trend was supported by higher capital, but also contracting risk exposure amounts. As of December 2019, 75% of the banks reported a CET1 fully loaded capital ratio above 13.4% and all banks reported a ratio above 11%, well above the regulatory requirements. 

    The EU weighted fully phased-in leverage ratio stood at 5.5% as of December 2019. The leverage ratio increased by 30 bps compared to the previous quarter, driven by rising capital and declining exposures. The lowest reported leverage ratio was 4.7% at country level and 1.6% at bank level. The asset quality of EU banks has been on an improving trend over the last few years. As of the fourth quarter of 2019, the EU weighted average nonperforming loan ratio declined to 2.7%, 20 bps lower than in the third quarter of 2019. The ratio in the fourth quarter of 2019 was the lowest since the EBA introduced a harmonized definition of nonperforming loans across European countries. Dispersion in the nonperforming loan ratio across countries remained wide, with few banks still reporting double-digit ratios, although in the last quarter the inter-quartile range compressed by 80 bps, to 3.1%.

    Earlier, EBA had postponed the EU-wide stress test exercise to 2021 to allow banks to focus on and ensure continuity of their core operations, including support for their customers. The Spring 2020 EU-wide transparency exercise comes as an exceptional disclosure in response to the outbreak of COVID-19. After postponing the EU-wide Stress Test to 2021, the Board of Supervisors agreed on an additional EU-wide transparency exercise to be carried out with the aim of providing updated information on bank exposures and asset quality to market participants. The transparency exercise is part of the ongoing efforts of EBA to foster transparency and market discipline in the EU financial market and complements banks’ own Pillar 3 disclosures, as laid down in the EU Capital Requirements Directive. Unlike stress tests, transparency exercises are purely disclosure exercises where only bank-by-bank data are published and no shocks are applied to the actual data. The Spring 2020 transparency exercise covers 127 banks from 27 European economic area countries and data is disclosed at the highest level of consolidation as of September 2019 and December 2019. The transparency exercise fully relies on supervisory reporting data.

     

    Related Links

    Keywords: Europe, EU, Banking, COVID-19, Spring 2020 Transparency Exercise, Transparency, Basel, Reporting, EBA

    Featured Experts
    Related Articles
    News

    UK Government to Set Out Rules on Wind-down of Critical Benchmarks

    HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.

    May 07, 2021 WebPage Regulatory News
    News

    EIOPA Launches Stress Test for Insurance Sector in EU

    EIOPA launched the 2021 stress test for the insurance sector in EU.

    May 07, 2021 WebPage Regulatory News
    News

    UK Authorities Publish Third Edition of Regulatory Initiatives Grid

    UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.

    May 07, 2021 WebPage Regulatory News
    News

    EC Consults on Regulation on Non-Financial Sustainability Disclosures

    EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.

    May 07, 2021 WebPage Regulatory News
    News

    OSFI Outlines Prudential Policy Priorities for Coming Months

    OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    BIS Announces TechSprint on Innovative Green Finance Solutions

    Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.

    May 06, 2021 WebPage Regulatory News
    News

    ACPR Publishes Version 1.0.0 of RUBA Taxonomy

    ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.

    May 06, 2021 WebPage Regulatory News
    News

    EBA Proposed Regulatory Standards for Central Database on AML/CFT

    EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.

    May 06, 2021 WebPage Regulatory News
    News

    ECB Responds to EC Consultation on Crisis Management Framework

    ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.

    May 06, 2021 WebPage Regulatory News
    News

    BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls

    BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.

    May 05, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6942