ECB Data Demands Called Excessive by Banks Facing Asset Review

ECB Headquarters
The European Central Bank is conducting a comprehensive assessment of the euro area’s most significant banks before becoming the currency bloc’s single supervisor in November. Photographer: Ralph Orlowski/Bloomberg

Euro-area banks urged the European Central Bank to reduce the information they have to provide as part of a review of their balance sheets because they say the demands are excessive.

European Banking Federation Chief Executive Officer Guido Ravoet wrote to the ECB yesterday, asking it to consider “substantially simplifying” the template for part of the Asset Quality Review. In the letter, which was obtained by Bloomberg News, the EBF also said that some of the data sought is not useful. A spokeswoman for the ECB couldn’t immediately confirm that the letter had been received.

The ECB is conducting a comprehensive assessment of the euro area’s most significant banks before becoming the currency bloc’s single supervisor in November. The assessment includes a probe into whether banks have adequate capital for selected loan portfolios. The ECB has said that where banks can’t provide data, auditors will adopt a conservative assessment of an asset’s value that may require them to hold extra provisions against losses.

There is “increasing concern over the extremely detailed questionnaires” by a deadline that “seems incompatible with the exercise,” the EBF said in the letter. “We cannot figure out what the usefulness of certain of these items may be for the AQR.”

The letter, sent to Jukka Vesala, the ECB director general for Micro-Prudential Supervision, relates to the template for the credit-file review, a part of the AQR that deals with individual loans made by banks. The template asks for data ranging from the original loan applications to details on borrowers’ tax affairs.

The EBF asked to discuss the matter at the federation’s April 8 meeting of its Single Supervisory Mechanism Strategy Group.

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