On 18 March 2011, the EBA had already published some details of this year’s stress test for leading European banks, in particular the stress test scenarios and a comprehensive methodology.

The 2011 EU-wide stress test assumes two basic scenarios: a “baseline scenario” and an “adverse macro-economic scenario”. The baseline scenario is based on the autumn economic forecast of the European Commission and includes the continuing recovery trend in the EU. The adverse scenario differs from the baseline scenario in that the overall deterioration of the GDP over a two-year period for example amounts to four percentage points in the 2011 stress test compared to three percentage points in the 2010 EU-wide stress test.

This year’s stress test also takes into account higher refinancing costs in situations of stress, which affects profitability and capital. Furthermore, stricter assumptions apply for the performance of an institution’s business in a crisis situation: such performance is assumed to be continuous and no changes of the business model are permitted (except in the event of a restructuring of the institution).

Across Europe 90 credit institutions are taking part in the 2011 stress test, of which 13 from Germany alone. These are:

• Bayerische Landesbank
• Commerzbank AG
• DekaBank Deutsche Girozentrale
• Deutsche Bank AG
• DZ Bank AG
• HRE Holding AG
• HSH Nordbank AG
• Landesbank Berlin AG
• Landesbank Baden-Württemberg
• Landesbank Hessen-Thüringen
• Norddeutsche Landesbank
• WestLB AG
• WGZ Bank AG

Deutsche Postbank AG is included in the Deutsche Bank AG stress test. All told, these institutions account for around 60% of the total German banking assets.