Quotidien Fintech, Blocktech, DeFi, Blockchain

Mercredi 13 Février 2013

Financial Regulation Program and the Framework of the EU Banking Union

The road to the EU bank union and the corresponding Financial Regulation Programme is paved with a long list of principles, procedures, frameworks and structures that support the supervision for governing the formation by the European Central Bank. It has been a struggle to reach a consensus for implementing the reforms that followed the credit and trust crisis throughout the EU. However for once most of the stakeholders agreed to centralize the oversight authority and responsibility.

Porbunderwalla Kersi
Porbunderwalla Kersi
The road to the EU bank union and the corresponding Financial Regulation Programme is further paved with a long list of implementation of systems, processes, controls, change management procedures and IT tools for almost each and every financial institution in Europe.

Economic and Monetary Union
The EU Council wants to move towards a genuine Economic and Monetary Union. The first step is to create a Bank Union with a regulations framework so that the sum of the financial regulation components together will form the basis for monitoring the European Banking and Financial Union.

However with the proposed/adopted reforms by the EU Commission provides a fairly straightforward answer on how we must maintain the Governance, Risk Management, Compliance and IT security processes and controls so that we can place the financial and regulatory systems back on track

Therefore, all of the stakeholders in the financial services industry should identify and accurately assess the consequences of the EU reforms. The deadlines are tough , and the complexities need undivided attention on how the key players will implement the new reforms and regulations without damaging the operations.

Additional oversight, compliance and controls
Financial Institutions continue to be at the center of the financial crisis, various other government institutions have bailed out failing banks and oversight authorities are pressing for additional controls, governance risk management and compliance.

All financial institutions in the EU need to prepare a gap analysis to find out the consequences of the reforms proposed by the EU Commission for the Financial Markets.

A good start could be to conduct a workshop and get the practical input from the internal stakeholders in relation to description/overview of framework, how to exercise the additional oversight and controls, reporting and disclosures and developing an IT Platform for reporting and follow-up.

Transparency and accountability issues
Then there are complex data protection and privacy issues of the new directives, their consequences in practice, in addition the financial institutions have to develop integrated and across the organization. The IT tool for legal and compliance and risk management so that transparency and accountability issues that are at the core of the reforms are in order.

Until implementation in march 2014, the financial sector will be extremely busy figuring out the consequences, updates, experience & reflections that need to be accommodated so that the centralised and decentralized functions, figure out the optimal scope of The EU Bank Union for the organisation – The what and the why.

Kersi Porbunderwalla is the founder and CEO of Riskability®, Copenhagen Compliance® and Copenhagen Charter®.
After his early retirement from ExxonMobil, Kersi has been involved in several Global Good Governance, Risk Management and Compliance (GRC) Projects for multinationals like IBM, Shell, BP, Volvo and others.
He continues to implement GRC journeys for a variety of clients to develop custom tailored GRC folder that includes methodologies, roadmaps, and specific solutions to assignments, training and certification.
Kersi conducts workshops, seminars and conferences that focus on developing and implementing GRC applications & frameworks into operational environments.
He is a consultant, instructor, researcher, commentator and practitioner on 4 continents.

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