Europe Corporate Governance Magazine
Spotlight on banking reform
In November 2014, the European Central Bank (ECB) assumes new banking supervisory responsibilities as part of wide-ranging changes to the way financial services businesses are regulated across Europe. The new regulatory framework, known as the Single Supervisory Mechanism (SSM), sees the ECB doing the leg work with national regulators and authorities to oversee large banks – significant credit institutions.
In this issue of European Governance magazine, Henrik Stein and Thierry Thouvenot – members of ECIIA’s banking committee – share their hopes and concerns over the new regime.
“Regulators and politicians often subscribe to the idea that ‘one size fits all,’ but I find it extremely difficult to apply such an approach to the hugely varied banking sector in Europe,” says Stein, the group’s chair.
Also in this issue, guidance by ECIIA and FERMA should help those on the journey to comply with new legislation that aims to bring more transparency to corporate behaviour, affiliate news and much more.
In the wake of the financial crisis, boards and company shareholders are beginning to focus on long-term value. The question for ECIIA Vice President Marie-Hélène Laimay is how internal audit can help them achieve that objective.
In the most recent issue of the ECIIA’s European Corporate Governance magazine, she said that Europe was in the process of designing the right governance model for the future and had already learned valuable lessons. That included the need for better, independent communication from shareholders on company performance and increased transparency in company reporting.
She underlined the ECIIA’s commitment to the Three Lines of Defence Model of corporate governance, where internal audit provided the third, independent line of assurance on an organisation’s risk management and controls. “The Three Lines of Defence model provides a structured corporate governance system that establishes clear roles and responsibilities,” she said. “We have been promoting its use to the Commission and our strategic partners.”
In the same issue, Nathalie Berger Head of Unit, Audit and Credit Rating Agencies, DG MARKT/F4 at the European Commission, said that it was time to look at how cooperation between internal and external audit could be improved. “If we look at the role of the audit committee, this is exactly where internal and external audit can and should meet,” she said. “That is why we think the audit committee should play a key role in improving this relationship.”