The European Banking Authority said on Monday it would assess how European banks would react to a hypothetical spiralling of geopolitical tensions and ensuing trade wars in an upcoming health check of the industry. The simulation, which assumes a dramatic blow to the European economy from geopolitical and trade shocks, kicks off just as Donald Trump is sworn in as U.S. president and prepares to review trade relationships with key partners. In launching its latest round of "stress tests", which will cover 64 banks accounting for three quarters of banking assets in the European Union and Norway, the EBA said it would publish the results of the check-up at the start of August.