The EACB expressed concern about the EBA's draft standard on material risk-takers, saying it did not leave room to apply the rules in line with the different banking models, such as the decentralised networks of co-operative banks.
The EACB General Manager, Hervé Guider, said: “As regards this standard, the EBA seems to deviate from the CRD. It does not leave room to apply the rules in line with the different banking models, such as the decentralised networks of co-operative banks. As a result, the possibility of staff member being identified as a material risk taker will be much higher in a smaller institution.”
Indeed, the need to take a proportionate approach based on the bank’s size, internal organisation and type of its activities, has been recognised by the EU legislator and is explicitly stipulated in the CRD. However the EBA proposal does not fully reflect that spirit.
In addition, the proposed standard is strongly focused on the level of total remuneration of staff. This is not in line with the primary objective of the underlying CRD provisions, which is to provide rules ensuring that payment of variable component is in accordance with the banks’ risk management.
“The standard would impose significant and completely unnecessary costs, in particular on smaller and medium co-operative banks. Indeed, the draft standard would require screening of large numbers of staff not having material impact on the bank’s risk profile. In our opinion, the EBA should keep to the limits imposed on it in the CRD”, Mr Guider added.
Press release
© EACB - European Association of Co-operative Banks
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