In Focus Risk
‘Stress tests will show a stronger banking industry’
Recapitalisation following the last banking crisis has led to a stronger, and more resilient, lending sector
Wim Mijs Chief executive, the European Banking Federation
Taking note of the announcement on the launch of the 2018 European Union-wide bank sector stress tests by the European Banking Authority, we would wish to underline our full commitment to this process, designed to maintain and reinforce the resilience of the banking sector.
Previous tests The previous tests, and also the asset-quality review of 2014, clearly demonstrated the resilience of the European banking sector, and showed the post-crisis recapitalisation efforts by European banks have paid off. Banks have continued to strengthen their
balance sheet in recent years, making it possible for the sector to withstand a severe economic downturn, such as the one being simulated in the tests. The new structure for bank supervision
in Europe, introduced in 2014 under the Banking Union, has quickly shaped the ‘new
We are confident that the third major round of stress tests, carried out under this new European reality, will again confirm the health and solidity of our sector
normal’ in European banking. Let me express my sincere appreciation for the close cooperation between the supervisors and the banks that has made this possible. We are confident that the third major
round of stress tests, carried out under this new European reality, will again confirm the health and solidity of our sector. Banks are allocating significant resources to the supervisory processes at a time when
profitability remains under pressure. That shows that we are fully committed, and our own Banking Supervision team is ready to provide guidance where needed. These tests help reinforce confidence in our
industry, and we are pleased to see that this is also being recognised by the supervisors.
Sampling The 2018 exercise, performed at a crucial moment when banks are migrating towards the new IFRS 9 accounting standards, is being carried out on a sample of 49 European Union banks, 35 of which are going to fall under the jurisdiction of the Single Supervisory Mechanism. We have published the common macro-
economic scenario for this exercise along with this announcement, while the final methodology has been defined earlier in November 2017. The results will be released by 2 November 2018. CCR
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www.CCRMagazine.com
March 2018
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