Introduction

1. The European Banking Authority (EBA) was established on 1 January 2011 with a broad remit that includes safeguarding the stability of the EU financial system. The EBA is required, in cooperation with the European Systemic Risk Board (ESRB), to initiate and coordinate Union-wide stress tests to assess the resilience of financial institutions to adverse market developments. Building on experience of two previous EU-wide stress tests undertaken by the EBA’s predecessor, the Committee of European Banking Supervisors (CEBS), the EBA is conducting a stress test on a wide sample of banks in the first half of 2011. This exercise is being undertaken in coordination with national supervisory authorities, the ESRB, the European Central Bank (ECB) and the European Commission. This stress test should be understood as part of the framework of the European System of Financial Supervision (ESFS) and will be carried out in parallel with stress tests of insurers undertaken by the European Insurance and Occupational Pensions Authority (EIOPA).
2. This document introduces the 2011 EU-wide stress test and provides the reader with an overview of the general features of the exercise. This document is supported by the Methodological note, which provides detailed instructions to participating banks. This note also references annexes to the Methodological note, which contains information on the scenarios, and market risk parameters.

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