EXCLUSIVE: ECB extends first data haul deadline to give banks extra time

Tue Nov 5, 2013 8:38am EST

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(Edits)

By Laura Noonan and Georgina Prodhan

LONDON/VIENNA Nov 5 (Reuters) - The European Central Bank has eased the first deadline for lenders to submit data to be used in its assessment of eurozone banks after some banks said they did not have enough time to meet the demands.

The extension underscores the challenge the central bank faces in carrying out a broad review of Europe's banking to eliminate doubts after five years of crisis and highlight weak spots and before it takes over as banking supervisor in late 2014.

The risk assessment is the first stage in that review and the ECB said affected banks had been given until November 29 to submit data. It was originally due to be submitted to the ECB by mid November, three European banking sources told Reuters.

The ECB said it would not compromise the overall timeframe for the tests but several bankers and supervisors have privately warned that the timetable will be difficult to meet.

"The preliminary data request was a nightmare for most people," one banker with an international consultancy firm with insight into several banks' experience. "It's a very complicated piece of work."

The data covers measures of liquidity and funding, the source said. It was requested from the eurozone's 128 largest banking groups, including Deutsche Bank, Santander and Societe Generale, via their national supervisors. It is not clear which banks have been given more time.

An official with a European bank said her institution had been asked for a large amount of data by the ECB and was finding the request "especially tough" because it included data that banks do not collect.

In Austria, a senior banker said his bank was resigned to the amount of work involved in meeting the Nov 20 deadline since the ECB needed to form impressions of the banking sector quickly before it becomes their supervisor.

A spokeswoman for the ECB confirmed that some national supervisors were allowed to "slightly extend" the deadline for gathering the first batch of data "to ensure that the collected data has the highest quality possible".

"This is not a general extension, it only applies where supervisors encountered difficulties and questions when gathering the data for the centralised risk assessment," she added.

PREPARATIONS

Banks have had several months advance warning about the ECB's review and an EU stress test in 2014, but are only now getting concrete detail on what data will be required.

Most of Europe's top thirty banks did not respond to detailed questions from Reuters on what preparations they had made so far. Several others said they would not comment.

Banks have had to deploy hundreds of people to work on data for previous rounds of stress tests. The 2014 tests are expected to be the most comprehensive yet since earlier exercises were criticised for not taking account of a wide enough range of data.

In Germany, a senior Bundesbank supervisor on October 25 warned of the "considerable extra workload" that would be created for the 24 German banks taking part in the ECB exercise. [ID: nL5N0IF2QF]

Alessio Balduini, who heads up Moody's Analytics' stress tests and Asset Quality Review team which advises banks and supervisors on risk management, said while some banks are already lining up resources, database and models to cope with the stress tests and ECB reviews not all are equally well-prepared.

The "best in class" are a group of about ten international banks with global exposures who have already been through the US stress tests and are pre-emptively implementing systems and procedures to churn out the data, Balduini said.

Another 30-35 larger banks have started to make changes to their organisation charts and governance structures to get ready for the stress tests, while the rest have taken initial steps and are waiting for more clarity before they intensify their efforts, he added. (Additional reporting by Eva Taylor and Tom Atkins in Frankfurt, Angelika Gruber in Vienna and Lionel Laurent in Paris; editing by Anna Willard)

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