White Paper

Supervisory stress testing expectations and impacts on European banks

Unlock nine principles for an integrated framework across all risk types

European banks are facing a more demanding stress testing environment as geopolitical risk, regulatory expectations and operational resilience requirements become more closely tied to capital planning. Institutions now need integrated frameworks that can model compound risk across credit, market, liquidity and operational exposures.

This whitepaper examines how supervisory stress testing expectations are evolving for European banks, using the Basel Committee’s nine stress testing principles as its framework. It explains how recent EBA and ECB developments, CRR3 impacts, DORA, SREP changes and geopolitical reverse stress testing are raising the bar for governance, data quality, scenario design and cross-risk integration.

Key Takeaways

• How European supervisory expectations are reshaping stress testing requirements

• Why geopolitical scenarios must be modeled across multiple risk types

• What banks need to strengthen in governance, data, IT systems and model validation

• How integrated stress testing supports capital planning, resilience and supervisory engagement

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