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UK-ECB-BANKS:ECB denies report on freeze of market abuse directive
Reuters A structure showing the Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt July 11, 2012. REUTERS/Alex Domanski

FRANKFURT (Reuters) - The European Central Bank on Friday denied a report that it was pressing the European Union's markets watchdog to grant banks exemptions from having to publish information relevant to their share price immediately during its bank balance sheet review.

German magazine Der Spiegel reported earlier, without citing sources, that the ECB would push the European Securities and Markets Authority (ESMA) for listed banks to be exempt from having to publish possible capital holes resulting from the tests right away, before the final results come out in October.

"The ECB is not seeking any change to the laws governing market abuse," an ECB spokeswoman said, referring to the Market Abuse Directive. "The results of the comprehensive assessment will be made public in October."

The ECB is putting the 128 banks it will supervise directly from November through a thorough quality check and stress test, hoping to unearth hidden losses, revive lending and restore investors' trust in the sector.

First information from the asset quality review is expected in July, months before the stress tests finish. The ECB plans to condense all results and release them in one go in October.

Two sources familiar with the procedures said the ECB is in talks with the ESMA to agree on procedures for how leaks and rumours should be handled.

ECB Vice President Vitor Constancio said this month that banks would have to go public right away if the asset quality review (AQR) revealed material discrepancies, adding that this did not apply to the stress test results.

"If indeed something big is suddenly discovered in the bank, very likely the supervisor, which will be still be the national supervisor at the time, will have to discuss that with the bank and ask for immediate action," Constancio told a news conference on February 3.

"And if that is the case, yes, then they have of course to disclose that to the market if that happens in that way."


Kicking off the second phase of the ECB's asset quality review, the ECB sent out the manual that sets general standards for how to do the assessment to the national supervisors a week ago and teams of auditors have already arrived at some banks.

There, the teams consisting of representatives from the corresponding national supervisors and external consultants or auditors will check banks' collateral and provisioning in the portfolios that were earlier identified as most risky.

An Austrian banker, who asked not to be identified, said the AQR team was due to arrive at his bank on Monday and tell his bank exactly what portfolios would get special scrutiny.

The ECB plans to publish the manual for the AQR by the end of March.

(Reporting by Michael Shields and Eva Taylor; Editing by Angus MacSwan)