Qualitative aspects of institutions
A focus on more qualitative aspects of institutions – such as corporate governance, risk
appetite and risk culture – also provides supervisors with important indicators of Board
effectiveness and the way that risks are taken and managed by an institution.
While these are
relatively new areas of attention for the prudential supervision of banks and insurers and are
difficult to measure, both BaFin and Bundesbank have already taken promising steps to
include them in their supervisory processes, including through regular attendance of Board
meetings, review of institutions’ risk reports, and interviews with board members. Drawing
on international guidance in this area, 40 the authorities are encouraged to continue to increase
their expertise and efforts to ensure appropriate coverage of these qualitative aspects through
on-site inspections and off-site analysis.
EU Forecast
euf:ba.18.j:96/nws-01