(Corrects reporter's name at top of story to Eva Taylor)
By Paola Arosio, Gianluca Semeraro and Eva Taylor
MILAN/FRANKFURT, July 3 The European Central
Bank will brief Europe's banks next week on its plan for
disclosing the results of a landmark asset quality review,
sources familiar with the matter said on Thursday.
The ECB faces a delicate balancing act as it tries to
maintain the secrecy of its work to avoid any breaches of market
disclosure rules, while not blind-siding banks with unforeseen
capital demands that they could struggle to fulfil.
An agenda for a meeting on July 10 shows the ECB's director
general for Micro-Prudential Supervision, Jukka Vesala, will
lead a three hour meeting to tell banks how the results will be
The meeting will also cover other queries from the 128 banks
undergoing the tests about the ECB's review, including the way
'challenger models' are used to validate the internal models
banks use to value assets that have no market valuation, like
"There are a lot of routine meetings to establish the
methodology of the process and the meeting of July 10 is one of
them," one of the sources said. "The banks have a lot of
requests and the ECB will give the methodology (for the results
disclosure)," the source added.
A second source close to the matter said a meeting with
chief financial officers and chief risk officers of the banks
was scheduled in Frankfurt from July 8 to July 10. The ECB
declined to comment.
The ECB's asset quality review of the euro zone's 128 most
important banks will be followed by an EU-wide "stress tests"
to see if the region's banks have enough capital to withstand
All results will be released in October. Banks have made
extensive preparations ahead of the tests, including raising
over 100 billion euros ($136.41 billion) in the nine months to
April, shedding assets and writing off bad debts.
($1 = 0.7331 Euros)
(Reporting by Paola Arosio and Gianluca Semeraro in Milan and
Eva Taylor in Frankfurt; writing by Stephen Jewkes; editing by
Laura Noonan and Tom Pfeiffer)