In-Depth Analysis - The Impact of Geopolitical Risks on the Resilience of Banks in the Banking Union - 31-10-2025
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This study quantifies the impact of geopolitical risk on euro area banks using the 2025 EU-wide stress test, the first to include an explicit geopolitical scenario. Comparing outcomes with earlier stress tests, we find that geopolitical shocks measurably erodIn-Depth Analysis - The Impact of Geopolitical Risks on the Resilience of Banks in the Banking Union - 31-10-2025
This study quantifies the impact of geopolitical risk on euro area banks using the 2025 EU-wide stress test, the first to include an explicit geopolitical scenario. Comparing outcomes with earlier stress tests, we find that geopolitical shocks measurably erode capital ratios, with smaller and less diversified banks most affected and considerable heterogeneity across countries. The results highlight how stress testing can capture structural vulnerabilities and inform supervisory responses through Pillar 2 requirements and Systemic Risk Buffers within the Banking Union framework. Source : © European Union, 2025 - EP Read more
 
                















