On 28 August 2019, the European Banking Authority (EBA) published the following:
- a report on funding plans. The purpose of the report is to assess the feasibility of EU banks’ funding plans submitted for the banking system in the EU. The EBA’s findings include, among other things, that the total assets of banks increased in 2018 by 0.5% compared to their 2017 levels and banks expect further growth over the next three years; banks plan to issue more debt instruments in the coming years; and banks assume that their costs for long-term market based funding will increase in 2019, reversing the downtrend observed over the last three years.
- a report on asset encumbrance. This report monitors the evolution of asset encumbrance and contributes to the ongoing assessment of the composition of funding sources across EU banks. The data obtained from 2018 evidences a stable level of asset encumbrance across the EU when compared to 2017. However, the asset encumbrance ratio is higher in countries where covered bonds are widespread or reliance on central bank funding remains material. The report also finds that repurchase agreement financing is still the most important source of asset encumbrance in the EU. Overall, the EBA notes that the stability of asset encumbrance ratios is a positive sign for the European banking sector.