EBA sees a more resilient EU banking sector but challenges in NPLs, IT security and long-term profitability remain

Background

+ The EBA has been conducting transparency exercises at EU-wide level on an annual basis since 2011. The transparency exercise is part of the EBA's ongoing efforts to foster transparency and market discipline in the EU financial market, and complements banks' own Pillar 3 disclosures, as laid down in the EU's capital requirements directive (CRD). Unlike stress tests, transparency exercises are purely disclosure exercises where only bank-by-bank data are published and no shocks are applied to the actual data.

+ The 2017 transparency exercise covers 132 banks from 25 EEA countries, and data is disclosed at the highest level of consolidation as of December 2016 and June 2017. Similar to the Risk Assessment Report, the transparency exercise fully relies on supervisory reporting data.

+ Along with the dataset, the EBA also provides a wide range of interactive tools that allow users to compare and visualise data by using maps and excel spreadsheets at a country and a bank-by-bank level.
The European Banking Authority (EBA) published in November 2017 its tenth report on risks and vulnerabilities in the EU banking sector. The report was accompanied by the 2017 EU-wide transparency exercise, which provides key data in a comparable and accessible format for 132 banks across the EU.

The data showed further resilience in the EU banking sector amid a benign macroeconomic and financial environment, with an additional strengthening of the capital position, an improvement of asset quality and a slight increase of profitability. However, further progress on NPLs is needed whilst the long-term sustainability of prevailing business models remains a challenge. The importance of robust data management and IT and operational resilience is also a priority.

EBA: 2017 EU-wide Transparency Exercise Results. Risk Assessment Reports https://www.eba.europa.eu/risk-analysis-and-data/eu-wide-transparency-exercise/2017/results

EBA: Risk Assessment Report, November 2017 https://www.eba.europa.eu/documents/10180/2037825/Risk+Assessment+Report+-+November+2017.pdf

EBA: Risk Analysis data: Risk Assessment Reports https://www.eba.europa.eu/risk-analysis-and-data/risk-assessment-reports

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