The average market risk premium used in Russia was the highest in 2025, reaching a value of ** percent in that year. The lowest market risk premiums used in that year were in France and Japan, at *** percent respectively.

The average risk-free rate (RF) used in Sweden fluctuated between 2015 and 2023. The risk-free rate is a theoretical rate of return of an investment with zero risk. This rate represents the minimum interest an investor would expect from a risk-free investment over a period of time. It is important to remember that the risk-free rate is only theoretical, as all investments carry even the smallest of risks. As of 2024, the risk-free rate in Sweden was *** percent, the highest ratio recorded since 2015.

Capital ratios express a bank's capital as a percentage of its risk-weighted assets (RWAs). Following the Basel III accord, European banks faced higher capital requirements phased in from ***************, establishing a new minimum Common Equity Tier 1 (CET1) ratio of *** percent. As of the last quarter of 2024, all European banking systems exceeded the required CET1 ratio. Cyprus, Latvia, and Bulgaria maintained the highest CET1 ratios, while the Netherlands and Greece recorded the lowest. European Banking Authority stress test Since 2014, the European Banking Authority has conducted stress tests to assess whether Europe's largest banks could withstand another financial crisis. These tests measure each bank's capital ratio under a 3-year adverse scenario. In the 2025 stress test, all institutions except La Banque Postale were determined to have sufficient capital to weather a potential financial crisis. Goldman Sachs Bank Europe SE emerged as the top performer in this latest assessment. Liquidity coverage ratio (LCR) As of *****************, it became a requirement for banks to hold a minimum of ** percent in high quality liquid assets (HQLA), which allowed them to survive in times of liquidity stress lasting up to ** days. This minimum requirement was to increase annually by ** percent until it reaches 100 percent as of 2019. As of *************, all European countries were able to meet this minimum requirement.