Mathieu Gitton’s Post

ECB Launches Consultation on Governance and Risk Culture On July 24, 2024, the European Central Bank (ECB) unveiled a draft Guide on governance and risk culture, inviting feedback from banks and stakeholders. This new Guide supersedes the 2016 supervisory statement, aiming to enhance internal governance and risk culture within banks. The Guide underscores the ECB's commitment to diverse, effective management bodies as a core priority of the Single Supervisory Mechanism (SSM). It details supervisory expectations, offering banks a clear roadmap for strengthening governance and risk management. Key points: - Management Composition and Function: Clarifying roles and responsibilities of internal control functions and management bodies. - Risk Culture Importance: Emphasizing robust risk appetite frameworks and decision-making processes. - Adherence to Updated Standards: Reflecting recent updates from the European Banking Authority (EBA) and showcasing good practices observed by the ECB. Past financial crises have highlighted the critical need for sound internal governance and risk culture. The ECB expects continuous improvement from banks, ensuring a balance between risk-taking and control to safeguard capital and operational resilience. #BankingSupervision #Governance #RiskManagement #FinancialStability #ECB #RiskCulture #BankingSector #Compliance #FinancialServices https://lnkd.in/etYrAWfd

📢 The European Central Bank just published its Draft guide on governance and risk culture. Take a look at the post below published by Maureen Finglass for some initial highlights. Further analysis to be published here soon: https://lnkd.in/ezt2Rb49

My new paper, "Systemic Risk Modelling System (SRMS): A Macroprudential Stress Testing Model," co-authored with Laurynas Naruševičius, is now available online! This paper introduces the Systemic Risk Modelling System (SRMS), a new macroprudential stress testing model for the Lithuanian banking sector. The SRMS enhances traditional stress testing by incorporating dynamic balance sheet assumptions and capturing second-round effects, providing a more comprehensive assessment of systemic risks. Read the paper below 👇 https://lnkd.in/ddsXekrc #MacroprudentialPolicy #SystemicRisk #StressTesting #FinancialStability

A good speech is always a great read - short, punchy and thought-provoking. Anneli Tuominen, A Member of the Supervisory Board of the European Central Bank, recently gave a speech on governance and risk culture. The key points: ⭐ Good governance and risk culture are essential for banks to make informed decisions. 🇪🇺 In Europe, there's been progress on banks' awareness of governance-related topics, but there are still long-term structural deficiencies in boards. 🤓 Board members should have the necessary knowledge, skills, and experience to contribute to the bank's specific areas of business. 💡 The collective skills of boards is crucial, with a broad range of experience, including risk management and diversity. 🏁 The ability to effectively challenge, including asking the right questions, is essential for boards to properly understand and assess risks. 🤔 Some questions to ask: Do you have a board skills matrix? How are you identifying and filling gaps in the board's skill set? How does your board exhibit 'soft skills' around challenge, constructive criticism and curiosity? What's the culture of your board and how is it shaping the risk culture of the broader organisation?

ECB consults on governance and risk culture ECB invites comments from banks and other stakeholders on draft Guide on governance and risk culture. Guide replaces 2016 supervisory statement, clarifies supervisory expectations and shares good practices for banks’ internal governance.

📊 **ECB Consultation on the Guide for Effective Risk Data Aggregation** The European Central Bank (ECB) launched a public consultation on Friday, May 3, on the guide for effective risk data aggregation and risk reporting. This consultation aims to gather public feedback on the proposed guide. The deadline for submitting comments was set for October 6, 2023, at midnight (24:00) CET. 🏦💬 The guide aims to assist financial institutions in improving their risk data aggregation practices and enhancing risk reporting. It is part of ongoing efforts to strengthen financial stability and banking supervision within the European Union. 🌍💼 Stakeholders are invited to participate in this consultation to provide their input and contribute to the development of an effective guide tailored to the needs of the European financial sector. The comments received will be considered in the finalization process of the guide. 💡🤝 For more information and to participate in the consultation, please visit the following link: [Public consultation on the Guide on effective risk data aggregation and risk reporting](https://lnkd.in/ehm72RA8) #ECB #PublicConsultation #FinancialRisks #FinancialStability #BankingSupervision

The Evolving Role of G-SIBs: Is Big Beautiful Again? There is a growing appreciation for global systemically important banks. But G-SIBs still face tough risk management standards and high capital requirements, and there is evidence that some extremely large banks are attempting to game the system, potentially increasing systemic risk.

The European Central Bank has released its new Draft Guide on #governance and #RiskCulture, replacing the 2016 SSM Supervisory Statement. This guide emphasizes the importance of robust governance frameworks in risk management, highlighting the principle that "well-run banks mean safer banks". The guide aims to bolster the stability and #resilience of the #EU's #banking sector, ensuring a secure #financial system. The consultation period runs until 16 October 2024. For more details, read the full article here: https://lnkd.in/dADfgiCa #GTG #FinancialServices #Fintech #DORA #ECB #RiskManagement #RiskCulture Ian Gauci l Cherise Abela Grech l J.J. Galea

The European Central Bank (ECB) has launched a public consultation on its new draft Guide on governance and risk culture as a response to financial geopolitical instabilities. This guide replaces 2016 supervisory statement, clarifies supervisory expectations and shares good practices for banks’ internal governance. Furthermore, it clarifies supervisors’ expectations regarding how management bodies and committees should be composed and function, ECB spells out the roles and responsibilities of the internal control functions, emphasises the importance of risk culture and outlines expectations regarding the risk appetite frameworks of banks. ECB encourages banks to enhance their governance structures and risk management processes. It stresses the importance of transparent leadership, comprehensive risk management in line with the Risk Appetite Framework (RAF), and the promotion of a risk-aware corporate culture. Internal audits should follow a risk-based approach, be thorough and regular, and cover all banking activities, including third-party operations, within a maximum of five years. The RAF should be updated for new risks such as cybersecurity and climate change, and should be integrated with the bank's business model and risk monitoring systems. The ECB expects banks to actively engage in the implementation and monitoring of the RAF, ensuring it aligns with their business strategy and to scrutinize any breaches. Internal control functions should confirm the suitability of risk limits, and the internal audit's independence and capability are vital for assessing the RAF's effectiveness. The ECB's supervisory approach includes both on-site and off-site assessments of governance and risk culture, examining documents, meetings, and the function of the management body, as well as governance documentation and policies. Reviews and targeted analyses help benchmark and identify best practices. If deficiencies are found, the ECB may use its supervisory tools, including administrative penalties, to ensure banks meet the expected standards. The ECB plans to continuously refine its supervisory approach to address governance and risk culture-related risks, considering the changing industry and regulatory environments. The ECB recommends diverse management bodies for better risk oversight and the independence of Chief Risk Officers for unbiased risk evaluation. The guide aligns with Basel Committee and EU regulations, advocating for effective internal controls and competent management of personnel, especially in IT systems. The consultation ends on 16 October 2024. #riskculture #riskgovernance #riskcontrols #riskappetiteframework #riskappetite #banking #cro #rolesandresponsibilities #regulatorychange #regulatoryaffairs #riskcommittee #internalaudit #independentaudit #ecb #bankingsupervision

New ECB Guide on Governance and Risk Culture out for consultation. The Guide will replace 2016 version on how management bodies and committees should be composed and function, spells out the roles and responsibilities of the internal control functions, emphasises the importance of risk culture and outlines expectations regarding the risk appetite frameworks of banks.