In cooperation with national supervisors, the ECB carries out financial health checks for the banks that it supervises directly. These comprehensive assessments help to ensure that banks are adequately capitalised and can withstand macroeconomic and financial shocks.
Comprehensive assessments are conducted either regularly or on an ad hoc basis:
- Regular: At periodic intervals , the ECB carries out an initial health check for all banks that have recently been classified or are likely soon to be classified as significant (meaning that they will now be supervised directly by the ECB).
- Ad hoc: The ECB also conducts assessments (i) in response to exceptional circumstances and (ii) where an EU country outside the euro area requests close cooperation between its national supervisor and the ECB (i.e. where it wants to join the Single Supervisory Mechanism).
|Ensure transparency||Enhance the quality of information available on the condition of banks|
|Rectify failings||Identify problems and implement necessary corrective actions|
|Build confidence||Assure all stakeholders that banks are fundamentally sound and trustworthy|
The assessment usually comprises two main pillars:
- An asset quality review (AQR) – to enhance transparency regarding banks’ exposures, including as regards the adequacy of asset and collateral valuations and related provisions
- A stress test, performed in close cooperation with the European Banking Authority (EBA) – to test the resilience of banks’ balance sheets
The methodology applied is set out in the following documents:
Each comprehensive assessment concludes with the disclosure of overall outcomes at an aggregate level, as well as the disclosure of bank-level data.
Explaining the disclosure template (based on an example from the 2014 comprehensive assessment)
Supervisors address all identified risks in their day-to-day supervision of banks. In particular, results are factored into the ongoing assessment of banks’ risks, governance, capital and liquidity as part of the Supervisory Review and Evaluation Process (SREP).
Where a comprehensive assessment is in response to a request from an EU country outside the euro area seeking close cooperation with the ECB, that country’s national supervisor will follow up on the findings.
- ECB concludes comprehensive assessment of two Italian banks, and one Estonian and one Lithuanian bank
- ECB concludes comprehensive assessment of UBS and Bank of America subsidiaries
- ECB concludes comprehensive assessment of five Croatian banks
- Assessment of six Bulgarian banks in 2019
- Assessment of Nordea in 2019
- Assessment of four euro area banks in 2016
- Assessment of nine euro area banks in 2015
- Assessment of four Greek banks in 2015
- Assessment of 130 euro area banks in 2014