On October 26, the European Banking Authority (EBA) released the results of its 2014 EU-wide stress test covering more than 70% of total EU banking assets.  The purpose of the test is to address remaining vulnerabilities in the EU banking sector.

The impact of the stress test is assessed in terms of the transitional CRR/CRD IV Common Equity Tier 1 ratio for which defines 8.5% as the ratio for an adverse scenario as of end 2013.  The EBA reported that 24 participating banks fell below the defined thresholds leading to an aggregate maximum capital shortfall of €24.6 billion.

The EBA states that the supervisory actions will be communicated by each competent authority shortly after the publication of the stress test results.  Report.