16 January 2020
The European Banking Authority (EBA) published today its Report on the application by Competent Authorities (CAs) of the EBA regulatory technical standards (RTS) on the criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile. This Peer Review shows that, within the European Economic Area (EEA), CAs have applied properly the RTS during the reference period from 1 January 2015 to 31 December 2017.
The Review Panel identified a number of best practices and weaknesses from CAs. As to the best practices, this Report highlights, in particular, the institution’s notification and prior approval process on the exemptions of identified staff, the assessment of the application of such exemptions, and the supervisory tools for assessing the institutions’ compliance.
As to the weaknesses, the Report highlighted that although CAs typically follow a risk-based approach, some of them have some difficulties to distinguish their standard risk-based methods of supervision and the application of the proportionality principle. This leads to diverging approaches and, in a few cases to the exclusion of certain institutions from the supervisory review on a systematic basis.
Peer review exercises are conducted in accordance with the provisions of Article 30 of the EBA Founding Regulation and the EBA decision establishing the Review Panel.