“The European Central Bank will soon find out how hard it can be to keep a secret.

“The ECB’s plan to keep its health check on euro-area lenders under wraps until the completion of a stress test in October could be undermined by national rules requiring disclosure far sooner. Domestic regulators may order banks to tap the market immediately if an Asset Quality Review ending in July shows they need more capital, according to law firms including Clifford Chance LLP.

“The risk is that market volatility could rise if multiple announcements cast doubt on the ECB’s control of a process designed to clean up balance sheets. Officials from the 128 lenders in the appraisal are meeting supervisory staff in Frankfurt today for an update on the Comprehensive Assessment, which includes both the AQR and the stress test. The ECB has said the exam will be more credible than previous efforts to restore trust to the financial system.

“This is the biggest blind spot in the ECB’s program,” said Nicolas Veron, a fellow at the Bruegel institute in Brussels and the Peterson Institute for International Economics in Washington. “The banks are still subject to national law, and it’s not clear to me that the ECB had fully integrated this into their planning for the Comprehensive Assessment. They don’t seem to have a very clear stance.”

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Read full Bloomberg article here.