The European Banking Authority (EBA) has published its draft methodology, templates and guidance for the 2027 EU-wide stress test, introducing major changes aimed at simplifying data requirements and improving risk sensitivity while maintaining robustness and comparability across the banking sector.

The 2027 EU-wide stress test exercise will include 63 banks from the European Union and Norway, with 47 institutions from the euro area, collectively covering around 75 per cent of the EU banking sector.

The EBA said the revised framework introduces significant simplifications designed to improve efficiency, while preserving the integrity and comparability of results across participating banks.

A key element of the updated methodology is a substantial reduction in data requirements, achieved mainly through greater reliance on harmonised supervisory reporting.

According to the EBA, the number of required data points has been cut by 55 per cent compared with the previous EU-wide stress test exercise.

This reduction is accompanied by a simplification of stress test definitions and the removal of overlapping templates and datapoints that duplicate existing supervisory reporting obligations.

The authority said the changes are designed to reduce duplication, lower administrative burden, and enhance consistency, comparability and data quality for supervisors.

Another major development in the 2027 framework is the introduction of climate risk into EU-wide stress testing for the first time.

The EBA said both transition risks and physical risks linked to climate change will be incorporated in a structured and consistent manner alongside traditional macro-financial shocks.

At this stage, climate-related risks will be assessed through a dedicated module and will not affect the core stress test results.

However, the inclusion of climate considerations was described as an important step towards integrating environmental risks into prudential supervision across the EU banking system.

The EBA also said the early publication of the draft methodology is intended to allow stakeholders to better assess the combined impact of changes to both the stress test framework and the broader review of the Implementing Technical Standards on supervisory reporting, which include a dedicated stress test reporting module.

The regulator said the timing of the consultation reflects feedback received from industry participants during discussions held in May 2026.

It added that the earlier release of materials will support banks in preparing for the upcoming exercise and adapting to the revised requirements.

The EBA also confirmed that it plans to hold a series of workshops with the banking industry to address questions and support institutions in their preparations for the 2027 stress test cycle.