EU watchdog to start next bank stress tests in first quarter of 2016

* Next EU banks stress test to start in Q1 2016

* EBA to conduct "transparency exercise" in late 2015 (Adds more detail)

LONDON, July 15 (Reuters) - The next stress test for the European Union's biggest banks will begin in the first quarter of next year, the bloc's banking watchdog said on Wednesday.

The European Banking Authority (EBA) and European Central Bank, which supervises the euro zone's top lenders, conducted a stress test and asset-quality review of lenders last year but decided against a full-blown test this year, opting instead for a less onerous transparency exercise covering fewer banks.

Next (Other OTC: NXGPF - news) year's test, however, will feature many aspects of the 2014 examination, including a "static" balance sheet to ignore changes to capital during the test, which could skew the result.

The EU-wide exercise is expected to start in the first quarter of next year with the release of the detailed scenario and methodology, the European Banking Authority said.

"The assessment and quality checks are expected to be concluded by the third quarter of 2016, when EU banks' individual results will be released," it added.

The watchdog said the separate transparency exercise on 109 lenders towards the end of this year will publish detailed information on bank balance sheets, covering their composition of capital, leverage ratios, risk-weighted assets, sovereign exposures and credit risk exposures.

"The data will also include information on asset quality, market risk and securitisation exposures as of December 2014 and June 2015," the EBA said. (Reporting by Huw Jones; Editing by David Goodman)