September 26, 2017

EBA revised the guidelines on internal governance for banks in the EU. The guidelines emphasize the duties and responsibilities of the management body in its supervisory function in risk oversight, including the role of their committees. The guidelines will enter into force on June 30, 2018.

The guidelines aim to further harmonize institutions' internal governance arrangements, processes, and mechanisms across the EU, in line with the new requirements in this area that were introduced in the Capital Requirements Directive (CRD IV: Directive 2013/36/EU), while also considering the proportionality principle. They aim to improve the status of the risk management function, enhance the information flow between the risk management function and the management body, and ensure effective monitoring of risk governance by supervisors. The framework for business conduct has been further developed and more emphasis is given to the establishment of a risk culture, a code of conduct, and the management of conflicts of interest. The updated guidelines were originally published on September 27, 2011, to address the potentially detrimental effects of poorly designed corporate governance arrangements on the sound management of risk.

 

Related Link: Revised Guidelines (PDF)

Effective Date: June 30, 2018

Keywords: Europe, EU, Banking, CRD IV, Internal Governance, Governance, EBA

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