Upsets unlikely as EU stress tests loom

摘要

European lenders are bracing for the outcome of the European Banking Authority's 2018 stress tests, designed with the most severe scenario to date and incorporating IFRS 9 accounting standards for the first time. The EBA plans to publish the results on or by November 2. Similar to the 2016 exercise, the test is primarily focused on the assessment of banks' solvency in various simulated scenarios. The adverse scenario implies a deviation of EU GDP from its baseline level by 8.3% in 2020, the most stringent yet.