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The European Banking Authority (EBA) published today its fourth thematic comparative Report on recovery planning. The focus of this comparative analysis is recovery options, which are crucial for assessing institutions’ actual capacity to regain viability following a period of severe financial distress. Overall, recovery plans in the sample provided a good overview of recovery options and clear improvements were seen across the board, although some challenges still remain. This benchmarking exercise aims at supporting supervisors in their assessment to identify the crucial elements that banks should consider when designing and selecting credible recovery options.

The European Banking Authority (EBA) organised on 1 and 2 March 2017 a Joint Colloquium with the International Monetary Fund (IMF) on ‘New Frontiers on Stress Testing’. The workshop brought together economists, supervisors and policy makers at European and global level with the objective of stimulating the discussion on different aspects of stress testing ranging from the latest methodologies and frameworks for the implementation of liquidity stress tests to macroeconomic variables, capital planning and governance.

The European Banking Authority (EBA) launched today a public consultation on its draft Regulatory Technical Standards (RTS) specifying the nature, severity and duration of an economic downturn according to which institutions shall estimate the downturn loss given default (LGD) and conversion factor (CF). These draft RTS are part of the EBA’s broader work on the review of the IRB approach aimed at reducing the unjustified variability in the outcomes of internal models, while preserving the risk sensitivity of capital requirements. The consultation runs until 29 May 2017.

The European Banking Authority (EBA) published today its eleventh Report of the CRDIV-CRR/Basel III monitoring exercise on the European banking system. This exercise, run in parallel with the one conducted by the Basel Committee on Banking Supervision (BCBS) at a global level, presents aggregate data on capital ratios – risk-based and non-risk-based (leverage) – and liquidity ratios – the liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) – for banks across the European Union (EU). It summarises the results using data as of 30 June 2016 but does not reflect any BCBS standards agreed since the beginning of 2016, such as the revisions to the market risk framework, or any other BCBS proposals, which have not yet been finalised, including the revisions to credit and operational risk frameworks.

The Board of Supervisors of the European Banking Authority (EBA) agreed in its meeting held on 14 February on the tentative timeline of the 2018 EU-wide stress test. The exercise is expected to be launched at the beginning of 2018 and the results to be published in mid-year. The EBA, in co-operation with Competent Authorities, is now in the process of preparing the methodology and templates with the objective of discussing with the industry in summer 2017. The new methodology will be revised to take into account the implementation of IFRS 9 both in the starting points as well as in the projections.