08 June 2017

EBA issues 2018 EU-wide stress test methodology for discussion

The methodology covers all relevant risk areas and, for the first time, will incorporate IFRS 9 accounting standards. The results will inform the 2018 Supervisory Review and Evaluation Process (SREP), challenging banks' capital plans and leading to relevant supervisory outcomes.  The exercise will also provide enhanced transparency so that market participants can compare and assess the resilience of EU banks on a consistent basis. The list of institutions participating in the exercise is also released.

The 2018 EU-wide stress test will be carried out at the highest level of consolidation on a sample of 49 EU banks, 35 of which falling under the jurisdiction of the Single Supervisory Mechanism (SSM). No single capital threshold is defined for this exercise as banks will be assessed against relevant supervisory capital ratios under a static balance sheet and the results will be an input to the SREP, under which decisions are made on appropriate capital resources and forward looking capital plans.

For banks starting to report under IFRS 9 in 2018, the 2018 EU-wide stress test takes into account the impact of the implementation of IFRS 9 on 1 January 2018 both in terms of starting point and projections.

The final methodology will be published as the exercise is launched, at the beginning of 2018, and the results to be published in mid-year 2018.

Press release

2018 EU-wide stess test-Draft Methodological Note

2018 EU-wide stress test-Draft Templates

© EBA