2016 European Union bank stress test

none The European Union-wide banking stress test 2016 was conducted by the European Banking Authority (EBA) in order to assess the resilience of financial institutions in the European Union to a hypothetical adverse market scenario. The stress test was formally launched on 24 February 2016 with a publication of the final methodology and templates as well as the scenarios. EBA to launch the 2016 EU wide stress test on 24 February 2016 http://www.eba.europa.eu/-/eba-to-launch-the-2016-eu-wide-stress-test-on-24-february-2016 European Banking Authority 2016-02-24 2016-02-24 2016-02-26 https://web.archive.org/web/20160226020224/http://www.eba.europa.eu/-/eba-to-launch-the-2016-eu-wide-stress-test-on-24-february-2016 dead It covered over 70% of the national banking-industry assets in the euro area, each EU member state and Norway.Glover John EU Cooks Up a Stress Test for 2016 That No Bank Will Fail https://www.bloomberg.com/news/articles/2015-11-05/europe-cooks-up-a-stress-test-for-2016-that-no-bank-will-fail 10 December 2015 Bloomberg Businessweek 5 November 2015 53 EU banks participated in the exercise, 39 of which are directly supervised by the ECB under European Banking Supervision. The outcomes of the exercise, including banks' individual results, were published on 29 July 2016, at 22:00 CET. Background The European Banking Authority (EBA) aims to ensure the proper functioning of financial markets and the stability of the financial system in the EU. To this end, the EBA has the right to conduct the EU-wide stress tests, in cooperation with the European Systemic Risk Board (ESRB). Such exercises are designed to test the resilience of financial institutions to adverse market developments. The stress tests are performed in cooperation with the ESRB, the European Central Bank (ECB), national competent authorities and the European Commission. In particular, the EBA was responsible for the common methodology and disclosure of the results. The ESRB and the European Commission designed the underlying macroeconomic scenarios. The quality assurance process of banks' results was led by the ECB and national competent authorities. Moreover, the ECB conducted the Asset Quality Review that served as a starting point of the stress test. Features of the stress test Banks needed to assess the impact of a macroeconomic baseline and adverse scenario. The scenarios each covered a period of three years (2015–2018). The macroeconomic adverse scenario and any risk type specific shocks linked to the scenario are developed by the ESRB and the ECB in close cooperation with competent authorities, the EBA and the European Commission. The latter will also provide the macroeconomic baseline scenario. EBA announces details of 2016 EU-wide stress test https://www.eba.europa.eu/-/eba-announces-details-of-2016-eu-wide-stress-test European Banking Authority 10 December 2015 5 November 2015 10 December 2015 https://web.archive.org/web/20151210144619/http://www.eba.europa.eu/-/eba-announces-details-of-2016-eu-wide-stress-test? dead Risk types considered in the stress test included credit risk including securitisations, market risk and counterparty credit risk, operational risk including conduct risk. In addition, banks are requested to project the effect of the scenarios on net interest income and to stress P&L and capital items not covered by other risk types. The 2016 exercise adds an explicit treatment of conduct risk and FX lending to its scope.EU-wide Stress Test 2016 - Draft Methodological Note http://www.eba.europa.eu/documents/10180/1259315/DRAFT+2016+EU-wide+ST+methodological+note.pdf European Banking Authority 10 December 2015 PDF 5 November 2015 The stress test relied on a static balance sheet assumption as of 31 December 2015, implying no new growth and a constant business mix and model over the whole time horizon.methodology The exercise is run at the highest level of consolidation. The scope of consolidation is the perimeter of the banking group as defined by the CRR/CRD IV (i.e. the implementation of Basel III in the EU). Insurance activities are therefore excluded both from the balance sheet and the revenues and costs side of the P&L. As opposed to the 2014 stress test, no single capital threshold is defined for this exercise as banks will be assessed against relevant supervisory capital ratios under a static balance sheet and the results will inform the 2016 round of Supervisory Review and Evaluation Processes (SREP) under which decisions are made on appropriate capital resources and forward looking capital plans are challenged. No hurdle rates or capital thresholds are defined for the purpose of the exercise. However, competent authorities will apply stress test results as an input to the supervisory review and evaluation process. Results No bank will be said to have failed because the test won't judge banks against a single capital threshold as in previous exercises. The outcomes of the exercise, including banks' individual results, was published on 29 July 2016.EBA announces timing for publication of 2016 EU-wide stress test results http://www.eba.europa.eu/-/eba-announces-timing-for-publication-of-2016-eu-wide-stress-test-results European Banking Authority 27 July 2016 PDF 19 July 2016 24 July 2016 https://web.archive.org/web/20160724145416/http://www.eba.europa.eu/-/eba-announces-timing-for-publication-of-2016-eu-wide-stress-test-results dead An expedited publication is designed to align the finalisation of the exercise with the cycle of the annual supervisory review and evaluation process (SREP), as this will ensure the results of the stress test are incorporated as an input to that process. DZ Bank was excluded from the test due to the ongoing merger with WGZ Bank, as well as National Bank of Greece was already covered in 2015 Comprehensive Assessment of European Central Bank. The following table lists the banks 1 banks that undergone the stress test: Fully loaded CET1 capital ratio Bank Country Starting 2015 Baseline 2018 Adverse 2018 Delta Adverse 2018 Erste Group Bank AG Austria 12.25% 13.55% 8.02% -423 Raiffeisen-Landesbanken-Holding GmbH Austria 10.20% 12.33% 6.12% -408 KBC Group NV Belgium 14.65% 17.60% 11.41% -323 Belfius Banque SA Belgium 14.88% 16.18% 11.27% -361 Deutsche Bank AG Germany 11.99% 12.41% 8.34% -365 Commerzbank AG Germany 12.13% 13.13% 7.42% -471 Landesbank Baden-Württemberg Germany 13.50% 14.17% 9.53% -397 Bayerische Landesbank Germany 11.11% 12.08% 7.80% -332 Norddeutsche Landesbank Girozentrale Germany 15.98% 15.58% 9.40% -658 Landesbank Hessen-Thüringen Girozentrale Germany 13.11% 14.42% 10.10% -301 NRW.BANK Germany 12.09% 13.16% 8.62% -347 Volkswagen Financial Services AG Germany 42.54% 39.44% 35.40% -714 DekaBank Deutsche Girozentrale Germany 11.67% 12.90% 9.55% -211 Danske Bank Denmark 15.48% 17.66% 14.02% -147 Nykredit Realkredit Denmark 16.00% 19.84% 13.99% -201 Jyske Bank Denmark 19.19% 22.03% 13.86% -533 Banco Santander S.A. Spain 10.27% 12.03% 8.19% -208 Banco Bilbao Vizcaya Argentaria S.A. Spain 11.72% 12.81% 8.04% -369 Criteria Caixa Holding Spain 10.20% 13.45% 6.62% -358 BFA Tenedora de Acciones S.A Spain 10.19% 13.17% 8.20% -199 Banco Popular Español S.A. Spain 13.74% 14.42% 9.58% -417 Banco de Sabadell S.A. Spain 9.65% 10.97% 7.81% -184 OP-Pohjola osk Finland 19.16% 20.92% 14.61% -455 BNP Paribas France 10.87% 12.09% 8.51% -236 Crédit Agricole Group France 12.78% 14.36% 9.47% -331 Société Générale France 15.55% 16.62% 13.38% -216 BPCE France 13.68% 14.81% 10.49% -319 Confédération Nationale du Crédit Mutuel France 14.51% 14.95% 9.82% -470 La Banque Postale France 10.91% 11.61% 7.50% -341 OTP Bank Nyrt. Hungary 12.94% 14.56% 9.22% -372 The Governor and Company of the Bank of Ireland Ireland 13.11% 13.90% 4.31% -880 Allied Irish Banks plc Ireland 11.28% 15.03% 6.15% -513 UniCredit S.p.A. Italy Intesa Sanpaolo S.p.A. Italy 12.39% 14.61% 9.00% -339 Banca Monte dei Paschi di Siena S.p.A. Italy Banco Popolare S.C. Italy 10.38% 11.47% 7.10% -329 Unione di Banche Italiane S.p.A. Italy 11.62% 13.01% 8.85% -277 ING Groep N.V. The Netherlands 15.44% 16.20% 9.53% -591 Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (RABO) The Netherlands 11.97% 13.33% 8.10% -387 ABN AMRO Group N.V. The Netherlands 12.70% 12.50% 8.98% -371 N.V. Bank Nederlandse Gemeenten The Netherlands 26.17% 28.05% 17.62% -855 DNB Bank Group Norway 14.31% 16.56% 14.30% -1 Powszechna Kasa Oszczednosci Bank Polski SA Poland 13.42% 14.73% 11.44% -198 Nordea Bank (group) Sweden 16.45% 18.60% 14.09% -236 Svenska Handelsbanken (group) Sweden 18.85% 21.55% 16.60% -225 Skandinaviska Enskilda Banken (group) Sweden 21.25% 23.09% 18.55% -270 Swedbank (group) Sweden 25.08% 27.47% 23.05% -203 HSBC Holdings plc United Kingdom 11.35% 12.48% 7.30% -405 Barclays Plc United Kingdom 11.87% 12.41% 8.76% -312 The Royal Bank of Scotland Group plc United Kingdom 13.05% 16.44% 10.14% -291 Lloyds Banking Group Plc United Kingdom 15.53% 15.89% 8.08% -745 References External links Banks European Banking Authority: 2016 EU-wide stress testing Category:European Union financial market policy Category:Stress tests (financial) Category:2016 in the European Union Category:Banking in the European Union Category:2016 in economic history