The European Central Bank (ECB) plans to conduct a thematic stress test in 2026 requiring banks to evaluate firm-specific geopolitical risk scenarios that could severely impact their solvency. ECB supervisors have advised banks to monitor both direct and indirect exposures to other countries, emphasizing risks stemming from tariffs and cyber attacks. This move comes amid concerns that banks may need to increase provisions due to the impact of tariffs. Meanwhile, the capital requirements for EU banks under stress tests have decreased to 370 basis points in 2025 from 459 basis points in 2023, reflecting changes in the regulatory environment and risk assessments.