3/5  BIS central bankers' speeches  As the emergency passes, we can undo those actions and get the balance sheet down to something close to its pre-pandemic trend. Second, by doing so, we free up balance sheet space in the event we need to expand it in the future to deal with economic shocks.
The ECB also conducts a parallel exercise covering the banks under its supervision that are not included in the EBA exercise. While this evolution in stress tests has occurred on both sides of the Atlantic – albeit with a few remaining differences in respective approaches – in my remarks today I will take a European perspective.