ECB sets 'ambitious' data deadline for selected banks

LONDON/FRANKFURT Fri Jan 17, 2014 1:49pm EST

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LONDON/FRANKFURT Jan 17 (Reuters) - The European Central Bank has given selected euro zone banks three weeks to submit extensive details of their trading books and risk models as part of a review of the currency bloc's largest banks.

The ECB is under pressure to uncover any nasty surprises on lenders' balance sheets before it takes over as the euro zone's financial supervisor in November, setting itself and lenders a huge challenge involving reams of data and thousands of people.

Four sources familiar with the request told Reuters the ECB sent the questionnaires to the national supervisors of the selected banks on Jan. 13. The banks' deadline is Jan. 31. The national authorities then have to send the data on to the ECB.

An ECB spokeswoman confirmed the latest data call. It comes after banks had the opportunity to comment on the templates during a field test in December. The ECB improved the data sheets accordingly.

In its templates, the ECB applied common definitions used in regulatory and accounting standards where possible.

"This is a horrible thing, it asks for details of all trading book portfolios," said one source familiar with the content.

"Large investment banks are going to have dozens and dozens of models," the source said, adding that the Jan. 31 deadline was very ambitious.

There were requests for other data before Christmas, including one that the ECB gave banks extra time to fulfil after push back.

The asset quality review will feed also into EU-wide stress tests that aim to banish lingering doubts on whether banks are strong enough to withstand future crises without needing further taxpayer bailouts.

Last year, Moody's Analytics warned that some EU banks might not be able to provide accurate data and meet the deadlines for the bumper series of regulatory reviews.

"The template was issued out of the blue," a second source familiar with its content said.

A German banking source said they received a request on Tuesday, "to identify their trading-book models at the portfolio level" but described it as a smaller request than the ones before Christmas which covered banks' lending activities.

The ECB said in October that in its assessment it would include "a quantitative and qualitative review of hard-to-value assets", which need to be valued using models because there is no liquid market or close comparators for them. (Additional reporting by Sarah White in Madrid; Editing by Hugh Lawson)

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