EBA 4

THE 2014 EU – BANKS STRESS TEST METHODOLOGY JUST RELEASED BY THE EUROPEAN BANKING AUTHORITY.

ON APRIL 29, 2014,  THE EUROPEAN BANKING AUTHORITY ( EBA ) RELEASED ITS METHODOLOGY AND MACROECONOMIC SCENARIOS FOR THE 2014 EU – WIDE STRESS TEST.

THE COMMON METHODOLOGY AND UNDERLYING ASSUMPTIONS COVER A WIDE RANGE OF RISKS INCLUDING CREDIT AND MARKET RISKS, EXPOSURES TOWARDS SECURITISATION, SOVEREIGN AND FUNDING RISKS.

TO ENSURE CONSISTENCY, THE METHODOLOGY IS RESTRICTIVE AND RESTS ON A NUMBER OF KEY CONSTRAINTS.

THE EU – WIDE STRESS TEST WILL BE CONDUCTED ON A SAMPLE OF 124 EU BANKS WHICH COVER AT LEAST 50% OF EACH NATIONAL BANKING SECTOR, AND WILL BE RUN AT THE HIGHEST LEVEL OF CONSOLIDATION.

THE RUNNING OF THE EXERCISE WILL INVOLVE CLOSE COOPERATION BETWEEN THE EBA AND THE COMPETENT AUTHORITIES AT NATIONAL LEVEL, INCLUDING THE EUROPEAN CENTRAL BANK ( ECB ).

THE RATIONALE FOR IT IS TO ASSESS WHETHER EUROPE’S BANKS CAN SURVIVE AN ECONOMIC SHOCK OR A DOWNTURN IN MARKETS.

THE 2014 EU – BANKS STRESS TEST MEANS A LONG – OVERDUE CLEAN – UP  OF EUROPEAN BANKS !

PHLDUCX – Publisher & Executive Editor – Professor of Finance & Banking -

 

http://www.off-the-recordmessaging.com/executive-workshop-from-basic-lending-concepts-to-advanced-credit-risk-analysis-techniques-in-commercial-banking-practice-skills-with-hands-on-case-studies-final-case-study-presentations-with