ECB to more closely link capital buffers and stress tests
  • Wednesday, 22 September 2021

ECB to more closely link capital buffers and stress tests

The ECB plans to place more emphasis on stress test results when it sets the capital buffers banks must maintain, according to Supervisory Board chair Andrea Enria. The ECB’s Pillar 2 Guidance (P2G) is designed to safeguard institutions in the event of losses, but many banks do not disclose that figure. Starting this year, the ECB plans to divide financial institutions into four groups based on vulnerability as shown in stress test results. The results of the latest stress test have recently been published by the European Banking Authority (EBA). In parallel, the ECB published, for the first time, selected information on medium-sized banks not part of the EBA sample.

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