EBA suspends EU banks’ stress tests over coronavirus impact
The European Banking Authority (EBA) is postponing an EU-wide stress test exercise as coronavirus spreads across the bloc.
The EBA is giving CAs flexibility to react to the coronavirus
According to the regulatory agency, addressing the operational challenges brought about by market instability takes precedence.
“The EBA has decided to postpone the EU-wide stress test exercise to 2021,” it writes. “This will allow banks to focus on and ensure continuity of their core operations, including support for their customers.”
Instead, the EBA will carry out an additional EU-wide transparency exercise in order to provide updated information on banks’ exposures and asset quality to market participants.
The agency has also recommended that competent authorities (CAs) across the continent plan supervisory activities, including on-site inspections, in “a pragmatic and flexible way”, and postpone those that are deemed non-essential.
Regulators are also being asked by the EBA to give banks some leeway in the remittance dates for some areas of supervisory reporting.
“CAs are encouraged, where appropriate, to make full use of the flexibility already embedded in the existing regulatory framework,” the EBA writes.
“The EBA, along with the European Central Bank, is coordinating a joint effort to alleviate the immediate operational burden for banks at this challenging juncture.”
Related: European Commission warns eight countries over late AML laws
