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European Banking Authority agrees key features of 2016 EU-wide stress test 

July 20, 2015

James Nickerson, City A.M.

The biggest banks in Europe will soon face more stress tests to ensure they are in a position to weather any further storms in the financial markets following the global financial crisis.

The European Banking Authority (EBA) has agreed some key elements of an EU-wide stress test due to take place in 2016, based on a constrained bottom up approach, including a static balance sheet assumption and wide risk coverage to assess EU banks’ solvency.

The EBA opted for a less onerous transparency test this year over a stress test, involving 109 lenders, which will publishing information on bank balance sheets, covering composition of capital, leverage ratio, sovereign exposure, risk-weighted assets and credit risk exposure.

Read More: City A.M.

 
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