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Some eurozone banks don't comply with governance standards: ECB's Lautenschlaeger
[FRANKFURT] The European Central Bank has found that a number of banks under its watch do not comply with international governance best practices, such as separating the audit and risk functions, an ECB executive board member said on Monday.
"Our initial findings indicate that a number of banks, while meeting national requirements, do not comply with international best practices with regard to governance," Sabine Lautenschlaeger, who represents the ECB's supervisory arm on the bank's board, said in remarks for a speech to be delivered in Milan.
She said the ECB's observations include examples of power concentration in individual board members, a lack of separation between a bank's risk and audit functions, information asymmetries among board members, and instances where the board does not take enough time to discuss and reflect on individual issues. "We will require banks to follow up on these findings."