EBA launches stricter EU-wide stress test for 2025
Banks face more scrutiny of credit risks following “overly optimistic projections” in past exercises
The European Banking Authority (EBA) on January 20 launched its latest large-scale stress test, which will involve the European Union’s biggest lenders.
The 2025 EU-wide stress test will be conducted on a sample of 64 lenders that cover 75% of total banking assets in the EU and Norway. It will have a three-year time horizon, lasting from 2025 to 2027.
The participating banks will be tested against a baseline scenario and an adverse scenario. The latter assumes a 6.3% decline in GDP in the EU
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