The European Banking Authority (EBA) has published a report on the findings of a peer review of the performance of stress tests by deposit guarantee schemes (DGS). The aim of the peer review was to assess the performance of stress tests by seven national DGS against five benchmarks stemming from the Deposit Guarantee Schemes Directive and the revised guidelines on stress tests of DGS. The EBA found that (i) all DGS effectively developed their stress testing programs in accordance with the methodology outlined in the guidelines, with only minor shortcomings, (ii) all DGS demonstrated effective cooperation with relevant authorities, with robust stress testing of these arrangements, (iii) five DGS could fully or largely showcase increased severity and complexity of their testing scenarios to adequately stress test their ability to intervene, with one partially demonstrating this and one, not at all, and (iv) five DGS could fully or largely showcase that they identified areas for improvement in their systems and have taken, or have planned to, take measures to address these areas, with only two partially demonstrating this. The report also details several follow-up measures for all EU DGS focusing on the prompt development of stress tests; the performance of stress tests; cooperation; severity and complexity of stress tests; and the identification of areas of improvement. The EBA will conduct a follow-up peer review of the implementation of the measures included in the report in two years.
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