Stress test · Supervisor
2023 EU-wide Stress Test: results
The 2023 adverse scenario was the most severe applied in the EU until then in terms of GDP decline, and banks showed resilience.
- Organization
- European Banking Authority (EBA)
- Document date
- 28 July 2023
- Type
- Stress test
- Language
- English
- Scope
- European Union
What it contains
The European Banking Authority (EBA) published on 28 July 2023 the results of its EU-wide stress test, in which 70 banks from 16 EU and European Economic Area countries took part, representing 75 % of EU banking sector assets. The exercise horizon is three years, to 2025, and it included 20 more banks than in previous editions and new methodologies for net fee and commission income.
The adverse scenario combines a severe EU and global recession, rising interest rates and higher credit spreads, and was the most severe used in the EU until then in terms of GDP decline. Under that scenario, capital depletion is 459 basis points and the fully loaded CET1 ratio falls from 15.0 % at end-2022 to 10.4 % at the end of the scenario. The leverage ratio falls from 5.4 % to 4.3 % and combined losses amount to 496 billion euros. In the baseline scenario, the CET1 ratio reaches 16.3 % in 2025.
The EBA notes that the resilience reflects a solid starting capital position and that the depletion was moderated by higher earnings and better asset quality at the beginning of 2023. The official results are those that the competent authorities submit and confirm, published by the EBA, and they are provided for transparency purposes. There are later editions of European stress tests, such as the 2025 one.
Why it matters for risk management
It serves as an example of how to design severe macroeconomic scenarios and how capital, leverage and loss results are communicated. It corresponds to the European banking sector and to 2023; for current monitoring, consult the most recent editions from the EBA and the ECB.
The site’s previous link pointed to a different document (a McKinsey report on AI from 2023); it was corrected to the EBA’s official source.
Summary prepared by the Dominican Republic Risk Management Club from a reading of the original document, with the source verified on 7 October 2026. It does not replace reading the official text and is not advice.
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