ECB Publishes Results of Geopolitical Risk Reverse Stress Test

The European Central Bank (ECB) has published the results of its 2026 thematic reverse stress test on geopolitical risks, covering 110 euro area banks directly supervised by the ECB.

The exercise aimed to strengthen banks' forward-looking risk management and stress-testing capabilities in an environment of heightened geopolitical uncertainty.

Banks were required to conduct a reverse stress test, identifying plausible geopolitical scenarios that would affect their capital positions. The results highlighted areas where further improvements are needed, including the granularity and sensitivity of risk assessments, as well as the realism of mitigating actions under systemic crisis situations.