The European Banking Authority has published its methodology and hypothetical scenarios, as designed by the European Systemic Risk Board (ESRB), to assess the resilience of banks under its regular EU-wide stress tests for 20161. The European Central Bank has outlined the methodology on its Supervisory Review and Evaluation Process, known as SREP, for the 129 most significant banks in the eurozone2.
Wim Mijs, Chief Executive of the European Banking Federation, says:
“This exercise, just like the earlier EBA stress tests and the ECB’s asset quality review in 2014, is part of the new supervisory reality and is a major undertaking for our sector. Banks are allocating significant resources to the supervisory processes at a time when profitability is under pressure. This clearly demonstrates that we are fully committed to working closely together with the supervisors in order to reinforce confidence in our industry.”
