On February 1, 2018, the European Banking Authority (“EBA“) published a press release announcing that it will be examining 37 euro area banks as part of the 2018 EU-wide stress test, and published the relating methodological note. The note describes the common methodology that defines how banks should calculate the stress impact of the common scenarios, and sets constraints for their bottom-up calculations, as well as provides guidance and support.

The adverse scenario for 2018 implies a deviation of EU GDP from its baseline level by 8.3% in 2020, resulting in the most severe scenario to date (the explanatory press release is available here), the results of which are expected to be published by November 2, 2018.

For the 2018 test, the EBA has also published the adverse macro-financial scenario (which can be found here), the market risk scenario (available here), a set of FAQs on the stress test (available here) and stress test templates.