by Calculated Risk on 7/07/2010 04:53:00 PM

From the Committee of European Banking Supervisors (CEBS) Key Features of the extended EU-wide Stress Test

The objective of the extended stress test exercise is to assess the overall resilience of the EU banking sector and the banks’ ability to absorb further possible shocks on credit and market risks, including sovereign risks, and to assess the current dependence on public support measures.

The exercise is being conducted on a bank-by-bank basis using commonly agreed macro-economic scenarios (baseline and adverse) for 2010 and 2011, developed in close cooperation with the ECB and the European Commission.
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On aggregate, the adverse scenario assumes a 3 percentage point deviation of GDP for the EU compared to the European Commission’s forecasts over the two-year time horizon. The sovereign risk shock in the EU represents a deterioration of market conditions as compared to the situation observed in early May 2010.
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The results of the stress test will be disclosed, both on an aggregated and on a bank-by-bank basis, on 23 July 2010.

The document has a list of the 91 banks.

More from Bloomberg: EU Stress Tests Will Cover 91 Banks, Assume Bond Drop