The European Banking Authority (EBA) published on 11 June 2026 the draft methodology, templates, and guidance for the 2027 EU-wide stress test, introducing significant simplifications and, for the first time, integrating climate risk into the exercise. The consultation, launched earlier than in previous cycles, aims to improve efficiency and risk sensitivity while preserving robustness and comparability. The 2027 exercise will cover 63 banks from the EU and Norway, representing 75% of the EU banking sector.
The draft methodology cuts required data points by 55% compared with the previous EBA stress test, mainly by drawing on regular supervisory reporting and eliminating overlaps. This reduction is expected to lower administrative burden, improve data consistency, and enhance data quality for supervisors. Climate risk is incorporated through a dedicated module assessing transition and physical risks alongside macro-financial shocks, though it will not affect core stress test results at this stage.
The early publication responds to industry feedback received during consultations in May 2026 and is part of the EBA's broader priority to simplify the regulatory and supervisory framework, as outlined in its report on efficiency published on 1 October 2025. The EBA plans to hold workshops with the industry to support preparations. The 2027 stress test is coordinated with the European Systemic Risk Board (ESRB), competent authorities, the Single Supervisory Mechanism (SSM), and the European Central Bank (ECB), which will develop the adverse macroeconomic and climate risk scenario.
Banks face reduced compliance costs due to simplified data requirements but must invest in new capabilities to model climate risks. Supervisors gain more consistent and comparable data, improving risk assessment. The EBA strengthens its role in integrating climate considerations into prudential supervision. The broader financial system benefits from enhanced resilience testing, though the climate module's separation from core results may limit immediate capital implications.