EBA updates on 2021 EU-wide stress test timeline, sample and potential future changes to its framework

The Board of Supervisors (BoS) of the European Banking Authority (EBA) agreed on the tentative timeline and sample of the 2021 EU-wide stress test. The exercise is expected to be launched at the end of January 2021 and its results to be published at the end of July 2021. 

The 2021 EU-wide stress test will be carried out at the highest level of consolidation on a sample of 51 banks, of which 39 from the Euro Area, covering broadly 70% of the banking sector in the euro area, each non-Eurozone Member States and Norway[1].

The tentative sample, which is also made available today, includes the banks that were going to participate in the postponed 2020 stress test, with some adjustments to ensure sufficient coverage in terms of total assets as well as to reflect changed conditions for specific institutions. UK banks are excluded from the sample while, their EU27 subsidiaries are included when necessary. The final sample can still be subject to adjustments, depending on possible mergers, divestments, restructuring, etc.

The EBA has also agreed on the preliminary timeline for the potential future changes to the EU-wide stress test framework, A final decision on potential changes to the framework, which takes account of the feedback received on the discussion paper is expected to be taken in Q2-Q3 2021, while the implementation of any potential change will be possible for the 2023 EU-wide stress test.