EBA Issues Updates on Stress Test Exercise for Banks in EU
EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021. Earlier, EBA had postponed the stress testing exercise in light of the unprecedented disruptions caused by the COVID-19 outbreak. EBA also published a list with a tentative sample of participating banks, including the banks that were going to participate in the postponed 2020 stress test, with some adjustments to ensure sufficient coverage in terms of total assets as well as to reflect changed conditions for specific institutions.
From the listed sample of banks, UK banks have been excluded while their EU-27 subsidiaries have been included, as necessary. The final sample list can still be subject to adjustments, depending on possible mergers, divestments, and restructurings, among others. The 2021 EU-wide stress test will be carried out at the highest level of consolidation on a sample of 51 banks, of which 39 are from the Euro area, covering broadly 70% of the banking sector in the euro area, each non-Eurozone member states, and Norway.
Additionally, the Board of Supervisors of EBA have agreed on the preliminary timeline for the potential changes to the EU-wide stress test framework. A final decision on potential changes to the framework, which takes account of the feedback received on the discussion paper published in January 2020, is expected to be taken in second or third quarter of 2021. The implementation of any potential change will be possible for the 2023 EU-wide stress test.
Related Links
- Press Release
- Sample of Banks (PDF)
- Discussion Paper, January 2020 (PDF)
- Overview of EU-Wide Stress Testing
Keywords: Europe, EU, Banking, EU-Wide Stress Test, Timeline, Stress Testing, 2023 Stress Test, 2021 Stress Test, COVID-19, EBA
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