Risk assessment

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 the supervised banks are exposed.

Risk Assessment for 2019

SSM Risk Map

The most important results of the risk assessment exercise are presented in the Single Supervisory Mechanism (SSM) Risk Map. The Map shows the key risk drivers that are expected to affect supervised institutions over the next two to three years.

SSM Risk Map for 2019

Source: ECB and national supervisors.

The 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.

Key risk drivers identified for 2019

The three most important risk drivers identified for 2019 are:

  • Geopolitical uncertainties
  • Legacy and potential future non-performing loans (NPLs)
  • Cybercrime and IT disruptions

These are followed by repricing in financial markets, the low interest rate environment and banks’ reaction to regulation.

Information about past risk assessment exercises published in the Supervision Newsletter: