{
  "title": "Euro Area: Publication of Financial Sector Assessment Program Documentation-Technical Note on Stress Testing the Banking Sector",
  "publication": "IMF Staff Country Reports, July 25, 2025",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2025/07/25/euro-area-publication-of-financial-sector-assessment-program-documentation-technical-note-568945",
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  "summary": "This technical note (TN) focuses on the euro area (EA) banking sector, which has weathered a succession of shocks over the past few years with notable resilience.",
  "sections": [
    {
      "heading": "Overview and scope",
      "content": "- This technical note (TN) focuses on the euro area (EA) banking sector and its resilience amid successive shocks over recent years.\n- Publication date: July 25, 2025.\n- Pages: 138\n- Volume: 2025\n- Issue: 210\n- Series: Country Report No. 2025/210\n- DOI: https://doi.org/10.5089/9798229018166.002\n- Stock No: 1EUREA2025007\n- ISBN: 9798229018166\n- ISSN: 1934-7685"
    },
    {
      "heading": "Key findings on sector performance and risks",
      "content": "- Resilience fundamentals:\n  - Strong starting capital positions.\n  - Ample liquidity.\n  - Diversified deposit base.\n- Recent outcomes:\n  - Capital ratios and liquidity cushions have edged higher.\n  - Non-performing loans continued to decline.\n  - Profitability rose to post-global-financial-crisis highs in 2023, buoyed by wider interest margins.\n- Emerging signs of stress:\n  - Profitability retreated in late 2024 as asset-quality indicators began to soften.\n  - Large cross-border groups display thinner capital and liquidity buffers and lower returns than mid-sized domestic peers, reflecting structural differences in business models.\n- Interpretation:\n  - Recent trends signal both the rewards of prudent balance sheet management in good times and latent pressures that could resurface should macro-financial conditions deteriorate."
    },
    {
      "heading": "Stress-testing focus areas and methodologies (as highlighted)",
      "content": "- Liquidity and funding:\n  - Cash flow liquidity stress tests.\n  - Liquidity requirements and liquidity risk analysis.\n- Solvency and interactions:\n  - I. solvency stress test results.\n  - Solvency-liquidity interaction assessments.\n- Credit and household vulnerability:\n  - Credit stress testing and household vulnerability assessment.\n- Other analytical elements:\n  - Net fee analysis.\n  - Emphasis on cross-border group vulnerabilities versus domestic peers."
    },
    {
      "heading": "Subject classification and keywords",
      "content": "- Subject: Asset and liability management, Credit, Financial regulation and supervision, Financial sector policy and analysis, Liquidity, Liquidity requirements, Liquidity risk, Money, Stress testing\n- Keywords: cash flow liquidity stress tests, Credit, Europe, Global, household vulnerability assessment, I. solvency stress test Results, Liquidity, Liquidity requirements, Liquidity risk, net fee, solvency-liquidity interaction, Stress testing\n\nInternational Monetary Fund. Monetary and Capital Markets Department \"Euro Area: Publication of Financial Sector Assessment Program Documentation-Technical Note on Stress Testing the Banking Sector\", IMF Staff Country Reports 2025, 210 (2025).\n\n---\n\n Content in this bundle\n\n- Executive Summary\n  - Executive Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Executive Summary (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: July 25, 2025",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798229018166.002",
    "This technical note (TN) focuses on the euro area (EA) banking sector and its resilience amid successive shocks over recent years.",
    "Publication date: July 25, 2025.",
    "Pages: 138",
    "Volume: 2025",
    "Issue: 210",
    "Series: Country Report No. 2025/210",
    "DOI: https://doi.org/10.5089/9798229018166.002",
    "Stock No: 1EUREA2025007",
    "ISBN: 9798229018166",
    "ISSN: 1934-7685",
    "Resilience fundamentals:",
    "Recent outcomes:",
    "Emerging signs of stress:",
    "Interpretation:",
    "Solvency and interactions:",
    "Other analytical elements:",
    "Subject: Asset and liability management, Credit, Financial regulation and supervision, Financial sector policy and analysis, Liquidity, Liquidity requirements, Liquidity risk, Money, Stress testing",
    "Keywords: cash flow liquidity stress tests, Credit, Europe, Global, household vulnerability assessment, I. solvency stress test Results, Liquidity, Liquidity requirements, Liquidity risk, net fee, solvency-liquidity interaction, Stress testing",
    "**Executive Summary**"
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