The European Banking Authority published the Spring 2025 edition of its Risk Assessment Report, supplemented by the Spring Risk Assessment Questionnaire, finding EU/EEA banks remained resilient on capital, liquidity and profitability as of end-2024 but face rising vulnerabilities from geopolitical developments and market volatility. The report notes a robust capital base and historically high profits, while warning that increased uncertainty and financial market volatility could challenge their sustainability. Liquidity continued to substantially exceed minimum standards, although heightened volatility could create emerging risks. Credit risk is flagged as a potential pressure point where banks have exposures to sectors affected by tariffs or supply chain disruptions, with manufacturing cited as an area of notable exposure in several countries. Operational risk is described as rising sharply, particularly from cyber threats and increased fraud. Banks’ funding plans indicate a strategy focused on leveraging deposits and issuing secured debt to support strong asset growth, while a significant share of exposures could be affected by transitional and physical climate-related risks with material variation across banks and countries.

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