Page 10 - EBA 2013.2869 Risk Assesment Report final proof4

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E U R O P E A N B A N K I N G A U T H O R I T Y
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1. Introduction
This is the third semi-annual report on risks
and vulnerabilities of the European banking
sector by the European Banking Author-
ity (EBA). The report describes the main de-
velopments and trends that affected the EU
banking sector in the first semester of 2013
and provides the EBA’s outlook on the main
micro-prudential risks and vulnerabilities
looking ahead.
With this report and those published in July
2012 and January 2013, the EBA discharges
its responsibility pursuant to recital 43 of
Regulation (EU) No 1093/2010 of the Euro-
pean Parliament and of the Council of 24 No-
vember 2010 to monitor and assess market
developments as well as to provide infor-
mation to other EU institutions and general
public. The EBA believes that the information
contained in the report provides the relevant
stakeholders with a useful benchmark for
analysis.
The report draws on the views of banks and
national supervisors to construct a forward-
looking view of risks that are becoming of
concern to regulators and policy-makers.
Among other sources of information, this
report is based on four main exclusive data
sources, namely:
(a) EBA key risk indicators;
(b) EBA risk assessment questionnaire for
banks;
(c) EBA risk assessment questionnaire for
market analysts; and
(d) Micro prudential expertise and college
information gathering.
The EBA key risk indicators (KRIs) are a set
of 53 indicators collected on a quarterly ba-
sis by national supervisors, from a sample of
57 European banks in 20 EEA countries from
2009 onwards. The banks in the sample cover
at least 50 % of the total assets of each na-
tional banking sector. Most of the indicators
are not publicly available; therefore these
data provide a unique and valuable source of
information. The reference date for the most
recent data is 31 December 2012. Information
about the sample and descriptive statistics of
the latest KRIs can be found in both the ap-
pendix and annex.
Since KRIs are collected at a point in time,
they tend to be backward-looking in nature.
They are thus complemented with various
forward-looking sources of information and
data, such as semi-annual surveys.
The EBA conducts semi-annual surveys, the
risk assessment questionnaire (RAQ), ask-
ing banks and/or their financial supervisors
a number of multiple choice questions. In-
formation from the questionnaire completed
in April 2013 and comparisons with previous
answers from a representative sample of 35
banks, listed in the appendix, was used for
this report. In addition, the EBA conducted
a survey (RAQ for market analysts) asking
market analysts (nine respondents) a num-
ber of questions in a five-way multiple choice
format with responses reflecting the degree
of agreement to the statement made. Con-
clusions should be treated with caution due
to the fact that questionnaires are sampling
only the large EU groups (RAQ for banks)