EBA issues 2018 EU-wide stress test draft methodology – including IFRS 9 impact
Is your organisation stress test ready?
On 7 June, the European Banking Authority (EBA) published its 2018 EU-wide stress test draft methodology and templates for discussion with the industry.
· The exercise will cover 70% of the EU banking sector and will assess EU banks' ability to meet relevant supervisory capital ratios during an adverse economic shock.
· 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 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.
- Updating internal stress testing methodology incorporating IFRS9 sensitivity analysis
- Optimizing capital allocation and Risk Weighted Assets
- Updating ICAAP and Recovery Plan to include IFRS9 impact
- Review Capital Plan and Dividend Strategy
Feel free to contact us for a Stress Test workshop