Risk assessment of the European Banking System, June 2014

This is the fifth semi-annual report on risks and vulnerabilities of the European banking sector conducted by the European Banking Authority (EBA). This report describes the main developments and trends that affected the EU banking sector in the first half of 2014 and provides the EBA’s outlook on the main micro-prudential risks and vulnerabilities looking ahead.

The report shows improvements in market sentiment and confidence which has allowed banks to increase their capital levels ahead of the 2014 EU-wide stress test and to continue the repair of their balance sheets. However, the report cautions about ongoing uncertainties on asset valuations and future profitability in an environment where the signs of recovery remain modest and fragile. The report also draws attention to looming redress costs related to conduct issues as well as to geo-political concerns in emerging markets, which could lead to risk aversion and to an impact on capital flows.

EBA: Press Release, 25.06.14: EBA publishes report on risks and vulnerabilities of the EU banking sector https://www.eba.europa.eu/-/eba-publishes-report-on-risks-and-vulnerabilities-of-the-eu-banking-sect-2

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

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