EBA Risk Report Shows Stability but Low Profits
Good news from the European Banking Authority (EBA) this week as their periodic risk assessment of the EU banking sector shows stable capital ratios and improving asset quality.
The Risk Dashboard’s second quarter update, which summarises the main risks and vulnerabilities in the EU banking sector, shows steady improvement despite the challenges of low profits and high costs. Average capital ratios remained broadly unchanged at 14.4% and the ratio of non-performing loans declined to 3.0%. Cost to income, however, remained high at 64.1% – potentially a challenge with rising economic and political uncertainty.
The ability to identify and analyse trends, risks and vulnerabilities like these across borders and sectors is essential to ensuring stable financial markets. Harmonised definitions are key to providing the open, comparable data behind this analysis – in XBRL format.
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