Are EBA Banking Sector's Stress Test Results Country or Ownership Specific?

Zuzanna Wośko

doi:10.33119/ERFIN.2024.9.2.1

Zuzanna Wośko SGH Warsaw School of Economics, Poland

DOI: https://doi.org/10.33119/ERFIN.2024.9.2.1

Keywords: Banking Sector, Risk, EBA Stress Test, Ownership, Country Characteristics, Resilience

Abstract

This paper presents the results of an assessment of the impact of country and ownership specific features of banks on the results of the EBA cyclical stress tests. For the purpose of panel model estimation a dedicated database has been built by the author. The results of the random effects panel model support some anecdotal evidence on the influence of local regulators. The model results also prove the efficiency of restructuring plans. They helped banks with the plan to better prepare for turbulent times. Ownership structure had a significant impact on stress-test performance. Being a bank with the state as the largest shareholder or being a cooperative bank significantly improved the performance of the bank in the EBA stress tests. The research focuses on qualitative characteristics assuming no impact of banks' finances or business cycle.

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