The European Banking Federation, as the representative body for 32 national banking associations in Europe, takes note of the European Banking Authority’s (EBA) publication of its 2016 European Union-wide stress test.
The EBA test is a regular, technical check of the resilience of the European banking sector. The exercise tested 51 European banks and covered approximately 70% of all banking assets in the EU.
The results clearly demonstrate that the recapitalisation effort European banks have made in recent years is bearing fruit. Even after the Comprehensive Assessment at the end of 2014, European banks have continued to strengthen their balance sheets. The EBA stress test makes clear that the EU banking sector as a whole is able to withstand a severe economic downturn like the one simulated by the EBA.
“This test has demonstrated that the European banking sector is resilient. Our banks continue to make significant efforts to shore up their balance sheets. Compared to five years ago, the ratio of highest-quality capital of European banks is now more than twice” said Wim Mijs, Chief Executive at the EBF.
