ECB to redraft bank-secrecy agreement after legal doubts voiced
By Bloomberg
The European Central Bank will rewrite a non-disclosure agreement with lenders undergoing its current health-check, after fewer than half the institutions agreed to the terms.
"We're working closely with banks and as part of this, we will address feedback received on the non-disclosure agreement in a revised version to issue to banks in the coming days," the Frankfurt-based ECB said in an e-mailed statement.
As it subjects about 130 of the euro-area's largest banks to a year-long asset review and stress test, the ECB is nervous of leaks endangering financial stability. Results from the assessment are due to be released to the public in the second half of October, before the central bank takes over financial supervision duties for the region in November.
While about 60 banks have already signed an original secrecy agreement, the ECB received letters of complaint from lenders across the euro area voicing concern that the terms of the agreement would infringe national laws governing securities disclosure, a euro-area official familiar with the discussions said. The person asked not to be identified as the issue isn't public.
The ECB had asked banks to commit to secrecy about the process without limitation in time, according to a letter from German bank lobby group Die Deutsche Kreditwirtschaft seen by Bloomberg News.
Stress Test
In the letter, addressed to ECB Supervisory Board Chair Daniele Nouy and ECB Executive Board Member Sabine Lautenschlaeger, and dated Sept. 12, the group said the scope of the non-disclosure agreement was too broad.
"We are especially concerned about the unlimited validity of the declaration," the group said in the letter. By requiring secrecy even after the publication of the stress test results, banks may not be allowed to comment "meaningfully," according to the letter.
The ECB plans to publish results of a review of banks' books and their performances in a hypothetical economic downturn, known as a stress test, in October before taking over as supervisor of Europe's largest banks on Nov. 4.
Handelsblatt reported on the letter earlier today.
"Any such legally required publications should explicitly be excluded from the scope of the declaration and should not result in any legal consequences," according to the letter.
The ECB is aware of the potential ambiguities in the original text, and the intention had not been to override national laws, the euro-area official said.
High-Quality Capital
Banks will begin to discuss the impact of preliminary findings from the Comprehensive Assessment with the ECB in Frankfurt starting next week.
"With each and every bank this will be a very intense meeting, giving the bank a very clear understanding of what are the topics that have an impact on their CET1 ratio," Elke Koenig, president of Germany's Bafin regulator said last week. The ECB requires lenders to be able to maintain levels of high- quality capital, known as CET1, of 8 percent in the asset review and 5.5 percent in the adverse scenario of the stress test.