Every year, ECB Banking Supervision – in close cooperation with national supervisors – identifies and assesses the risks faced by euro area banks. The outcome of this exercise serves as a basis for defining supervisory priorities and determines focus areas for the regular monitoring and analysis of risks to which supervised banks are exposed.
The most important results of the risk assessment exercise are presented in the Single Supervisory Mechanism (SSM) Risk Map. The Risk Map shows the key risk drivers that are expected to affect supervised banks over the next two to three years.
SSM Risk Map for 2020
Source: ECB and national competent authorities.
*The execution risk attached to banks’ strategies for non-performing loans (NPLs) only applies to banks with high levels of NPLs.
**Climate change-related risks are more relevant over the longer-term horizon (i.e. a horizon of more than three years).
The SSM Risk Map shows an aggregated euro area picture and highlights only the key risk drivers, meaning that it should not be considered an exhaustive list of all the risks faced by supervised banks. The risk drivers should not be viewed in isolation as they may potentially trigger or reinforce each other.
These are followed by: execution risk attached to banks’ strategies for non-performing loans; easing lending standards; repricing in financial markets; misconduct, money laundering and terrorist financing; Brexit; the global outlook and geopolitical uncertainties; reaction to regulation; and climate change-related risks.
Information about previous risk assessment exercises: