3.4.2 EBA Guidelines 2012

First of all, in 2012 the EBA issued Guidelines broadening the scope of the requirements from persons who effectively direct the business of the credit institution to all members of the management body and key function holders.1 The term management body refers to the governing body (or bodies) of a credit institution, comprising both the supervisory and the management function. Key function holders, such as the heads of internal control functions, are also covered since, as mentioned in the Guidelines, they have significant influence over the direction of the institution.2

The Guidelines also explain how criteria such as good repute and sufficient experience should be interpreted by credit institutions and financial supervisors. For example, when assessing ‘good repute’, they should take into account criminal records, tax offences and administrative sanctions, as well as past personal and business conduct and the relationship with the supervisory or regulatory authorities. ‘Sufficient experience’ should be assessed in the light of the institution’s size and internal organization, the nature, scope and complexity of its activities and the duties and responsibilities of the specific position that is to be filled (the proportionality principle). This principle does not apply, however, when assessing good repute. All members of the management body should be of good repute, regardless of the nature, scale and complexity of the institution or the position or the member within it. Furthermore, all requirements should be fulfilled at all times. These principles still apply today.