The stress tests conducted by the European Banking Authority (EBA) and the European Central Bank (ECB) indicated that banks both in Europe and the euro area would be able to survive even a significant economic downturn. The results were published late this Friday.
The EBA assessed the resilience of the 70 largest EU banks to adverse developments. 57 euro area banks and 13 banks from outside the euro area took part in the test. The ECB assessed the resilience of 41 medium-sized euro area banks at the same time. The two stress tests covered a total of 98 euro area banks, which is 80% of the banking sector in the euro area. The aim of the tests was to assess the banks’ ability to cope with financial and economic shocks.
Luminor Holdings was the only Estonian bank in the ECB stress test. Swedbank and SEB Pank took part in the EBA stress test as part of Swedish banking groups. The banks operating in Estonia are strong and well capitalised.
Supervisory authorities take stress test results into consideration when preparing the Supervisory Review and
Evaluation Process (SREP) and assessing the banks’ risks and capital requirements.