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Banking 27 Sep 2018

European banks ready for fifth transparency exercise

The European Banking Authority (EBA) has launched its European banking transparency exercise for 2018. This is the fifth time the European supervisor has carried out this probe of the banks in the euro area. It will reveal its findings of 130 banks covering 900,000 data points in December.

The EBA’s annual transparency exercise offers European citizens a wide amount of information of banks in the euro zone. It covers aspects such as capital positions, exposure to sovereign risk, asset quality and exposure to other risks. The results will be published along with the EBA’s Risk Assessment Report (RAR).

According to the European Banking Authority, the probe “is an important component of the EBA’s responsibility to monitor risks and vulnerabilities and foster market discipline.”

The information reported will be in line with the previous exercises, although the introduction of the new IFRS 9 regulation has required a revision of the templates banks have to complete. Sovereign exposure data will be enhanced with additional information on transparency exercises of previous years.

The EBA will analyze data for December 2017 and June 2018, with the results expected to provide more information than in previous occasions. In a news statement, the EBA said it expects to report on up to 900,000 data points, 300,000 more than in the 2017 exercise.

In parallel, the EBA is also expected to report the results of its annual stress test of European banks on November 2. One of the main novelties expected is that the supervisor will set a threshold for minimum capital for each bank based on its characteristics instead of a common requirement for all of them.

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