The European Banking Authority (EBA) today published documents explaining the scenarios and methodology for its 2011 EU-wide stress test, which will be applied on a wide sample of European banks covering over 60% of total EU banking assets.

The EU-wide stress test is a supervisory tool designed to assess the resilience of European banks to hypothetical external shocks. The stress test assesses what might happen to banks if external circumstances deteriorate markedly and helps to identify vulnerabilities and relevant remedial action, including strengthening capital levels where this is needed.

Read full EBA stress test scenarios and methodology.