We appreciate the ECB’s effort to take into consideration, in its draft Guide on governance and risk culture, the heterogeneity of the European banking landscape and the fragmentation of the legislative environment. We also support the ECB's view that banks are responsible for defining their governance arrangements and for setting their own risk culture. However, we believe that further work will be needed to fine-tune the guide to avoid that certain provisions create new layers of uncertainty. It is important that the ECB adjusts several strict limitations embedded in the guide by duly taking into consideration cooperative banks' governance arrangements, culture and the national legal frameworks.
The paper underlines three main issues that should be addressed:
1) the guide specifies cases that are not in line with practices fully shared/applicable across the banking industry or the national legislations;
2) the text is often ambiguous, allowing multiple interpretations and not fully aligned with the Guidelines produced by EBA and ESMA;
3) although the aim of the ECB is clear, the role of the guide remains uncertain, also considering the hierarchy of EU law.