* Hundreds of Europe supervisors review banks' data
* EBA expects changes to banks' initial results
* No bank able to fully complete ECB templates
By Laura Noonan
LONDON, Aug 19 (Reuters) - Europe's banks have done the heavy-lifting in the toughest ever test of their financial strength, but an intensive quality assurance process and decisions still to be taken by supervisors means they can't work out how they've fared.
The European Central Bank (ECB) has spent the last five months reviewing the books of about 130 of the euro zone's largest banks and is now running 'quality assurance' checks on the information gathered before a 'stress test' into how those banks would fare in another financial crisis or recession.
Banks will have to wait until around Oct. 17, for the ECB to publish its verdict and individual capital raising requirements. This will coincide with results of European Banking Authority (EBA) "stress tests" on whether about 125 of the EU's most important banks are strong enough to deal with future crises.
Banks submitted their own simulations of the stress tests to supervisors in early July and some bankers believe they already have enough information to figure out if they need more capital.
But as officials thrash out key issues including a possible inconsistent treatment of which debts should be classified as 'going concerns' and which are already 'gone', the process still has some way to run before they can reach any conclusions.
"We expect changes to banks' submissions (on the stress tests)," said Piers Haben, a senior official at the EBA. "It's the nature of the interaction with supervisors. Banks are likely to have an optimistic view, supervisors should cast a cold light on things. No-one knows the outcome."
Undertaken to restore faith in the euro zone's banks before the ECB takes over as supervisor on Nov. 4, the review is the most ambitious assessment of European lenders ever attempted.
Its hallmark - the forensic review of how banks value assets and treat bad loans - involved banks submitting as many as 307,000 data points each and deploying thousands of staff.
This workload has rankled with some. Sources said support staff worked late into the night and through weekends, and holidays were banned, particularly in May and June as banks and auditors worked to meet deadlines for submitting loan data.
Not everyone thinks it was worth the effort. "There is no reasonable balance between expenditure and return," said one banker. "For us, the amount of knowledge gained in the AQR (Asset Quality Review) was zero."
The ECB is now reviewing the quality of the data, with 84 people working intensively on a quality assurance process, which includes running some 45 million numbers through an IT system. Several hundred others in national supervisors across the euro zone are also working on quality assurance, the ECB said.
Three sources familiar with the process said virtually every bank involved had left some blanks in the mammoth templates that the ECB had asked them to fill out. Where important numbers are missing, the ECB is asking for them to be filled.
"There is a very detailed process of engagement," said Richie Boucher, chief executive of Bank of Ireland, at the bank's half-year results announcement. "One of the things that is a key criteria that the ECB have absolutely said is that they are looking for consistency across Europe."
One issue is an inconsistent treatment of bad loans across countries, two sources familiar with the process said. The ECB declined comment on this, but said it was working to ensure consistency across all areas.
A questions and answers document, continually updated with the ECB's verdict on various issues, is running at well over 1,500 entries, and only a handful of valuation issues remain, including how to value German shipping loans.
In London's financial district, the EBA is poring over the initial stress test submissions to see how individual countries' results stack up against international benchmarks and to make sure all used the methodology properly.
Its team, of up to 20 people, will have to turn around as many as a million data points - or 80,000 per bank - for national supervisors on single nights in August so that national supervisors can better understand what banks have submitted.
Haben said final supervisory decisions on whether the banks had been conservative or not in their application of the stress tests would not be taken until closer to October.
Areas for potential pushback against the banks' findings include how caps and floors are applied to banks' future income, since the EBA methodology doesn't allow banks to assume they can pass on rising interest rates to clients limitlessly, Haben said.
The EBA will also be working with supervisors to ensure that banks have based their future earnings on their current balance sheets, though the disclosures will also provide details of material adjustments since January and some insight into how those changes will affect banks over the stress test horizon.
For now, banks are enjoying the calm before the results are released. A Commerzbank manager said auditors camped out at their office for the tests had left. "All that remains is 10 brand new coffee machines that we had to buy for them," he said. (Additional reporting by Andreas Kroener, Eva Taylor and Alexander Hubner in Frankfurt and Padraic Halpin in Dublin; Editing by Alexander Smith and Anna Willard)