The Greek banks, NBG, Piraeus and Alpha Bank, are preparing for the stress test to be conducted by the European Central Bank.

ECB supervisors will examine 51 of the largest banks in the euro area, representing around 75% of the euro area banking sector's assets, as part of the EU-wide stress test exercise coordinated by the European Banking Authority (EBA).

THE SCENARIOS

The adverse scenario is based on a hypothetical severe escalation of geopolitical tensions, accompanied by increasingly inward-looking global trade policies, leading to higher energy and commodity prices, supply chain disruptions and adverse effects on private consumption and investment, combined with a global economic contraction.

The deteriorating economic outlook is associated with a sustained decline in EU GDP of 6.3% cumulatively over the period 2025-2027. At the end of the horizon, EU unemployment is projected to be 6.1 percentage points (ppts) above its baseline level. Inflation shifts upwards to 5% and 3.5% in 2025 and 2026, respectively, before falling back to 1.9% in 2027.

As in the 2023 EU-wide stress test, this year's scenario includes information on Gross Value Added (GVA) growth in 16 sectors of economic activity. This analysis will help to better assess the performance of EU banks, depending on their business model and industry exposures.

ECB

In parallel, the ECB will conduct its own stress simulation exercise for 45 medium-sized banks that are not included in the EBA sample due to their smaller size. The ECB intends to publish the results of both stress tests in early August 2025. The results will help to assess how hypothetical adverse shocks affect the resilience of banks under adverse macroeconomic conditions.