The European Banking Authority (EBA) is mandated by Article 74 of the Capital Requirements Directive IV (CRD IV) to develop guidelines that will further harmonise institutions’ internal governance arrangements, processes and mechanisms.
The EBA has now published a consultation paper containing draft guidelines on internal governance. The draft guidelines complete the various governance provisions in the CRD IV taking into account the principle of proportionality, by specifying the tasks, responsibilities and organisation of the management body, the organisation of institutions and groups, including the need to create transparent structures that allow for the supervision of all their activities and specific requirements for the three lines of defence and, in particular, the risk management, compliance and audit function.
The draft guidelines also update the EBA’s existing guidelines on internal governance (published on 27 September 2011) and, in particular, introduce additional aspects that aim to foster a sound risk culture to be implemented by the management body, to strengthen its oversight over the institutions’ activities and their risk management framework. Additional guidelines have been provided to further increase the transparency of institutions’ offshore activities and the consideration of risks within institutions’ change processes.
The deadline for comments on the consultation paper is 28 January 2017.
The EBA is updating in parallel its guidelines on the assessment of the suitability of the members of the management body and key function holders.
View EBA reviews its guidelines on internal governance, 28 October 2016