2026 reverse stress test on geopolitical risk

The European Central Bank (ECB) has published the main conclusions of its 2026 reverse stress test on geopolitical risk, in which 110 directly supervised banks participated. The exercise assesses their preparedness for severe geopolitical scenarios and their ability to identify vulnerabilities and adopt viable management actions.

2026 reverse stress test on geopolitical risk

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Executive summary

The reverse stress test assesses banks’ ability to anticipate and manage the impact of severe geopolitical scenarios. The ECB set a predefined level of capital depletion and asked each bank to design its own geopolitical scenario capable of causing it, identifying how the impact would be transmitted through credit, market, liquidity, funding and operational risks.

Based on the results, the ECB identifies three key areas for improvement: i) ensuring reliable information systems and granular data; ii) strengthening the role of management bodies in assessing resilience under different scenarios; and iii) establishing realistic management actions, taking into account that their effectiveness may be reduced if many banks resort to the same measures simultaneously.

Access the technical note on the 2026 reverse stress test on geopolitical risk.