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The CRD IV provisions have been further specified and enhanced the Guidelines issued by the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), introducing a set of more fine-grained requirements and suggesting to extend fit and proper assessment to certain senior managers (“key function holders”).
In the Banking Union, the ECB has released its own “Guide to fit and proper assessments”, in an attempt to promote greater homogeneity across Member States. The guide, however, is not legally binding and cannot supersede the requirements stemming from national law.
Differences across individual jurisdictions are striking and affect both the assessment process and the criteria used. As concerns the former, some Member States require ex ante decisions while others provide for ex post evaluations, to be performed after appointees have become members of the management body.
Additionally, national competent authorities serve as the entry point in the assessment process, leading to differences in the information gathered and to longer response times.
The criteria used are also deeply segmented, meaning that the Single Supervisory Mechanism must apply different standards for banks headquartered in different Member States. E.g., rules on honesty and integrity involve significant dissimilarities, making it easier for appointees to challenge the ECB’s views (above all in countries where the presumption of innocence has constitutional dignity) and leading the latter to adopt a cautious stance.
Additionally, country-specific regulations may provide for directors representing special constituencies, like trade unions and local authorities, whose qualifications are dictated by national rules. Some Member States have laws calling for Level 2 regulations that have never been enacted, meaning that the ECB should apply national rules that simply do not exist.