The European Banking Authority reports that EU/EEA banks continue to operate strongly with solid capital, liquidity, and profitability, despite increasing geopolitical, market, and cyber risks as of Spring 2026.
The European Banking Authority (EBA) published its Spring 2026 Risk Assessment Report (RAR), Q1 2026 Risk Dashboard (RDB), and Spring 2026 Risk Assessment Questionnaire (RAQ) results today.
The findings indicate that EU/EEA banks remain resilient, supported by strong capital and liquidity, good asset quality, and sustained profitability. Funding conditions are broadly favorable despite increased market uncertainty. The report provides insights into lending activity, balance sheet developments, funding strategies, and profitability outlooks.
EU/EEA banks face a challenging and rapidly evolving risk environment. Heightened geopolitical tensions, including the Middle East conflict, increase uncertainty, potentially impacting energy prices, inflation, economic activity, and market volatility. While direct exposures are limited, indirect effects could influence borrowers, funding conditions, and markets.
Operational and cyber risks are rising due to increased digitalisation, advanced technologies like artificial intelligence, and evolving cyber threats. The development of capable AI models may amplify operational and cyber risks, emphasizing the need for strong resilience, cybersecurity measures, and contingency planning.
Interconnectedness with non-bank financial institutions (NBFIs) and the private sector remains a concern. Exposures to NBFIs have increased, especially among larger institutions. Although private credit is vital for the economy, its expansion requires close monitoring due to potential risk transmission through funding relationships, common exposures, and competitive pressures.
