The objective of this Guide to fit and proper assessments is to explain in greater detail the policies, practices and processes applied by the ECB when assessing the suitability of members of the management bodies of significant credit institutions.
The management body of a credit institution must be suitable in order to carry out its responsibilities and be composed in such a way that contributes to the effective management of the credit institution and balanced decision-making. This will have an impact not only on the safety and soundness of the institution itself but also on the wider banking sector, as it will reinforce the trust of the public at large in those who manage the financial sector of the euro area.
Since 4 November 2014 the ECB has been responsible for taking decisions on the appointment of all members of the management bodies of the significant credit institutions that fall under its direct supervision. The Guide to banking supervision, published by the ECB in November 2014, touches briefly upon suitability assessments.
The policies, practices and processes described in this Guide may have to be adapted over time. It is meant to be a practical tool that will be updated regularly to reflect new developments and experience that is gained in practice.
The Guide aims to describe and make public the supervisory policies, processes and practices followed by the ECB when conducting fit and proper assessments. With these policies, processes and practices, the ECB aims to ensure the maximum consistency allowed by the legal frameworks applicable within the Single Supervisory Mechanism (SSM). Such consistent application aims to achieve common supervisory practices.
This Guide is not, however, a legally binding document and cannot in any way substitute the relevant legal requirements stemming either from applicable EU law or applicable national law, nor does it introduce new rules or requirements.
To the extent possible, the Guide follows the terminology used in the CRD IV and the Joint ESMA and EBA Guidelines on suitability and the EBA Guidelineson internal governance. For example, the term “management body” applies to the bodies in all governance structures that perform management or supervisory functions.
The Guide does not advocate any particular governance structure and is intended to embrace all existing structures.
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