Featured Product

    ESRB Publishes Quarterly Risk Dashboard in March 2019

    March 28, 2019

    ESRB released the 27th issue of its quarterly risk dashboard at a meeting held on March 21, 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 remained a concern, although market-based indicators of systemic stress in EU have slightly declined over the past quarter. The indicators of systemic stress recovered somewhat during the first quarter of 2019, after having increased at the end of 2018. The indicators for probability of simultaneous default by large and complex banking groups and EU sovereigns followed a similar pattern. Banking sector resilience continued to strengthen in the second half of 2018. The median common equity tier 1 to risk-weighted assets ratio increased to 16% in the fourth quarter of 2018, up from 15.8% in the fourth quarter of 2017. Moreover, the median ratio of non-performing loans to total gross loans and advances continued to improve, reaching 3.1% at the end of 2018, down from 3.3% at the end of 2017. Overall, ongoing supervisory and regulatory work, as well as the improved economic environment, continues to support the reduction of vulnerabilities in the European banking sector.

    For the insurance sector, the dashboard also shows that, despite a lower profitability due to reduced investment returns, the median solvency ratio in EU is stable above 200%. For non-life insurers, the median combined ratio is relatively stable over the past 5 quarters, below 100%. The dashboard covers data available to ECB by March 07, 2019. 

    Additionally, at the ESRB meeting, the General Board amended the ESRB Recommendation (2016/14) on closing real estate data gaps by adding a new sub-recommendation addressed to Eurostat (to identify a minimum set of common definitions of physical market indicators of commercial real estate), aligning definitions in the text with those included in EU legislation (including, for example, AnaCredit) and updating the deadlines for implementing the Recommendation. The General Board intends to publish the amended Recommendation together with an accompanying explanatory document that clarifies certain technical aspects. The General Board also approved a set of adverse scenarios prepared jointly by ECB staff and the ESRB Task Force on Stress Testing for the 2019 EU-wide stress test of institutions for occupational retirement provision by EIOPA; the ESMA 2019 EU-wide central counterparty stress test; and the ESMA guidelines on stress test scenarios on money market funds.


    Related Links

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

    Featured Experts
    Related Articles

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    MFSA Sets Out Supervisory Priorities, Issues Reporting Updates

    The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023

    March 02, 2023 WebPage Regulatory News

    German Regulators Issue Multiple Reporting Updates for Banks

    Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8806