EBA launches 2020 EU-wide stress test exercise

The European Banking Authority (EBA), launched the EU-wide stress test, the fifth exercise since its establishment, on 31 January 2020. Along with methodology and set of templates, EBA released the macroeconomic scenarios. After banks provide several submissions of stress test results and after these submissions are quality assured, EBA expects to publish the results of exercise by 31 July 2020.

In line with the previous exercises, no pass-fail threshold has been included as the results of the exercise are designed to serve as an input to the Supervisory Review and Evaluation Process (SREP).

This article provides further insight on the methodology of the adverse scenario for the EU-wide banking stress test.