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E X E C U T I V E S U M M A R Y O F T H E A N N U A L R E P O R T 2 0 1 6
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In July 2016, the EBA published a report on
the dynamics and drivers of non-performing
loans (NPLs) for over 160 EU banks. The
report showed that, despite improvements,
the NPLs level remains high, with significant
consequences for the economy and banks’
profitability. With over EUR 1 trillion of non-
performing loans in the EU banking sector,
the NPLs resolution represents one of the
biggest challenges and requires a coordinated
EU response.
Finally, in 2016, the EBA launched the EU-
wide stress test exercise, which allows the
comparison of EU banks’ resilience to adverse
economic shocks. The 2016 EU-wide stress
test did not contain a pass-fail threshold
and assessed 51 banks from 15 EU and EEA
countries – 37 from euro area countries and
14 from Denmark, Hungary, Norway, Poland,
Sweden and the United Kingdom. The exercise
was launched in February 2016 and results
were released at the end of July. In line with
the EBA’s objective of providing transparency
to market participants, detailed information
on individual banks’ starting points and stress
projections was released. Bank-by-bank re-
sults were complemented with interactive
tools accessible on the EBA’s website, as well
as an extensive database. While the outcome
showed, overall, a resilient EU banking sector,
the results varied widely across banks.
The EBA played an important role in promot-
ing and supporting the exchange of informa-
tion among supervisors. The Memorandum of
Understanding (MoU) for sharing macropru-
dential data of individual banks allows super-
visors, across Europe, to compare a set of risk
indicators for 200 banks. To enhance this data
set, the EBA developed its online analytical
tools, helping the national supervisors create
their own risk dashboard and European and
peer group analyses. In addition, for the first
time, the EBA published a list of other system-
ically important institutions (O-SIIs).
Figure 3: EU-wide transparency exercise
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