The European Banking Authority (EBA) has decided not to run stress tests in 2015, which are targeted at gauging whether European banks have adequate core capital to withstand shocks.
The watchdog will instead run another transparency exercise this year, which will aim to provide detailed data on balance sheets and portfolios of EU banks. The exercise will eb in line with a similar exercise carried out in 2013.
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EBA has said that it will brace up for another stress test exercise in 2016.
According to EBA, "The decision not to run an EU-wide stress test in 2015 was driven by an acknowledgement of the progress that EU-banks have made in strengthening their capital positions in response to the 2014 asset quality reviews and EU-wide stress test.
Moreover, these efforts were preceded by several years of capital raising spurred by the EBA’s 2011/12 recapitalisation exercise, which led EU banks to strengthen their capital positions by over 200bn and to start the 2014 exercise with a CET1 [common equity Tier 1] ratio of 11.5 per cent."
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