ECB is taking actions towards an efficient fit & proper framework
The integrity and competence of a bank’s directors is one of the most important lines of defence against mismanagement and fraud. The European Central Bank (ECB) performs the ultimate “quality control” – in supervisory jargon, the fit and proper assessment – for the biggest banks in the euro area. This process is very challenging for the ECB. Last year alone, the ECB assessed the suitability of 2,967 individuals for more than 100 banking groups. Similar figures are expected this year.
The ECB assesses the profiles of directors against the standards laid out in 2013 European directive (CRDIV). Among other things, the directive requires bank directors to be of “sufficiently good repute”, and to possess the sufficient knowledge, skills and experience to fulfil their functions.
This article provides further insight on ECB implementing stricter and more intrusive fit and proper assessments.