ECB 2018 stress test analysis shows improved capital basis of significant euro area banks

The European Central Bank (ECB) today published aggregate results for the 2018 stress test for all
participating banks under its supervision.

The 87 banks covered in the report include 33 euro area banks that were part of the EU-wide stress test
coordinated by the European Banking Authority (EBA). The ECB conducted additional stress tests on 54
significant institutions which it directly supervises and which were not part of the EBA stress test. Both
sets of results form the aggregate report released today. The reference date for the 2018 stress test was
31 December 2017.

The results show that the 87 banks directly supervised by the ECB have become more resilient to
financial shocks over the past two years. Despite a more severe adverse scenario than in the 2016 stress
test, the average Common Equity Tier 1 (CET1) capital ratio of all 87 banks after a three-year stress
period was 10.1%, up from 8.8% two years ago. The CET1 ratio is a key measure of a bank’s financial

Looking at the 54 medium-sized banks tested solely by the ECB, the results show that they have become
better capitalised, increasing their ability to absorb financial shocks. In addition to the EBA sample (33
banks), which covers around 70% of euro area banking assets, they represent a further 9% of banking
assets in the euro area.


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