Since 2011, the EBA has been conducting transparency exercises at the EU-wide level on an annual basis. These exercises are part of the EBA's ongoing efforts to foster transparency and market discipline in the EU financial market, and complements banks' own Pillar 3 disclosures, as laid down in the CRD IV.
Further, the transparency exercises are, unlike the stress tests, disclosure exercises where only bank-by-bank data are published and no shocks are applied to the actual data.
In December 2018, the EBA published the results of the EU-wide 2018 transparency exercise, which will facilitate the consistent comparison and assessment of the resilience of banks across time and at a country and a bank-by-bank level. In particular, this document assesses the results relative to the potential impact on, among others, capital, leverage, risk weighted assets (RWAs), P&L, credit risk, market risk, or asset quality.
According to the results of this exercise, the EU banking sector has continued to benefit from the positive macroeconomic developments in most European countries, which contributed to the increase in lending, further strengthening of banks' capital ratios and improvements in asset quality. Profitability remains low on average and has not yet reached sustainable levels.
This Technical Note analyses the main 2018 EU-wide transparency exercise results focusing on the aggregated results across the EU, as well as on the results of the countries with the highest volume of assets within the banking system.
The EBA published in December 2018 the result of the 2018 EU-wide transparency exercise, which provide detailed information on, among others, capital, leverage, RWA, P&L, credit risk, market risk, or asset quality.
Area of application
The 2018 EU-wide transparency exercise is applicable to 130 banks from 25 European Economic Area countries at the highest EU level of consolidation.
This Technical Note analyses the aggregate results relative to the potential impact on the following aspects:
In addition, this Technical Note includes the individual results for each of the major geographies, i.e. Germany, Spain, France, Italy, and UK.
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