EBA launches 2023 EU-wide stress test

The EBA has started its 2023 EU-wide stress test and released the corresponding macroeconomic scenarios.
This year, taking into account geopolitical tensions that caused a significant fall in GDP along with sustained inflation and a high interest rate, shows a breakdown of the shocks (on real gross value added) by economic sectors for the first time.
In comparison to past years, a substantially bigger sample of 70 EU banks and 75% of all EU financial assets will be used for the EU-wide stress test.
The scenarios will be used throughout a three-year period from the end of 2023 to the end of 2025. The exercise is conducted using year-end 2022 numbers.
The stress test’s goals are to:
+ assess and compare the overall resilience of EU banks to relevant severe economic shocks.
+ assess if bank capital levels are sufficient to ensure banks can support the economy in periods of stress.
+ foster market discipline through transparent publication of consistent, granular and comparable data at a bank-by-bank level.
+ provide input to the Supervisory Review and Evaluation Process (SREP) for competent supervisory authorities.