ECB urges banks to improve geopolitical risk assessments

The Central Bank of Cyprus (CBC) on Friday highlighted the results of the European Central Bank’s (ECB) thematic reverse stress test on geopolitical risks, which assessed how 110 euro area banks under direct ECB supervision would respond to severe geopolitical scenarios.

The exercise, which forms part of the ECB’s broader supervisory focus on geopolitical risks for 2026 to 2028, examined banks’ ability to identify and assess potential threats in an environment of heightened global uncertainty....