EBA discloses 2015 transparency exercise & key features of 2016 EU-wide stress test

Buy one get one free: The European Banking Authority (EBA) published today a tentative sample of banks taking part in the 2015 transparency exercise, together with the draft templates illustrating the type of data that will be disclosed.

In addition, following the approval by its Board of Supervisors, the EBA released the key features and a tentative calendar of the 2016 EU-wide stress test.


2015 Transparency exercise

Towards the end of 2015, the EBA will be carrying out a transparency exercise, publishing detailed data on EU banks’ balance sheets, covering their composition of capital, leverage ratio, risk weighted assets (RWAs) by risk type, sovereign exposures and credit risk exposures.

The data will also include information on asset quality, market risk and securitisation exposures as of December 2014 and June 2015. The data collection will be based, primarily, on regular supervisory reporting data (COREP and FINREP) with some limited information to be collected directly from institutions.


2016 EU-wide stress test

The EBA Board of Supervisors has also agreed some key elements of the 2016 EU-wide stress test, which will feature many aspects of the 2014 EU-wide stress test. Notably, the 2016 exercise will be based on a constrained bottom up approach, including a static balance sheet assumption and wide risk coverage to assess EU banks’ solvency.

The 2016 EU-wide stress test will however, build on the lessons learned from previous exercises and, for example, will be more closely aligned with the cycle of the annual supervisory review and evaluation process (SREP), to ensure the results of the stress test are incorporated as an input to that process.

The draft methodology and templates will be discussed with relevant stakeholders before the end of 2015 and the detailed aspects and milestones of the exercise will be communicated in the coming months.

The 2016 EU-wide exercise is expected to be launched in the first quarter of 2016, with the release of the detailed scenario and methodology. The assessment and quality checks are expected to be concluded by the third quarter of 2016, when EU banks’ individual results will be released.

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