Working to Rules

Summer 2012


Melissa Allen
Regulatory Risk Consulting
+44 (0) 20 7694 4185



Countdown to the new 'twin peaks' FCA / PRA model

Cause for complaint? Complaint handling under the regulatory microscope

FATCA – Recently released guidance accelerates focus on business impacts

The cornerstone for AIFMD Level II implementation

EBA guidelines on internal governance – How ready are you?

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EBA Guidelines on Internal Governance – How ready are you?

"...serious deficiencies in prudential oversight and financial regulation... were accompanied by major governance failures within banks. These contributed materially to excessive risk taking and to the breadth and depth of the crisis."
- Sir David Walker, November 2009

Interest in, and scrutiny of, corporate governance by regulators, external agencies and other stakeholders has surged following the banking crisis. Recent reports by the Financial Services Authority (FSA) into the causes of bank failure and other incidents such as rogue trading continue to draw attention to the importance of firms' governance arrangements in delivering desired regulatory outcomes.

The European Banking Authority (EBA) is the latest to weigh into the debate. It recently published new guidelines on internal governance, which consolidate a number of previous requirements and expectations into one document.

What do the guidelines entail?

The EBA guidelines and 30 principles on internal governance are contained in a lengthy 90 page document, and cover five broad areas:

  • Corporate structure and organisation
  • Management body
  • Risk management and control functions
  • Information systems and business continuity
  • Transparency

While most firms will have the basic corporate governance framework in place, the EBA guidelines are quite detailed in some of the above areas. There is a focus on decision-making throughout the various layers of the organisation - not just at the board. For many firms the challenge will be to evidence both the implementation and consistent and effective operation of their governance arrangements.

Ensuring readiness

Now the EBA guidelines have been issued, firms have to strengthen their internal governance arrangements by 1 April 2012. Find out more here.

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Melissa Allen
Regulatory Risk Consulting
+44 (0) 20 7694 4185

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