The European Banking Authority has issued Guidelines that outline the process, criteria and minimum requirements for assessing the suitability of members of the management body and key function holders of a credit institution. The Guidelines represent the EBA’s “view of appropriate supervisory practices within the European System of Financial Supervision or of how Union law should be applied in a particular area”.

The Guidelines contain provisions to be followed by both credit and financial institutions (including mixed financial holding companies) and competent authorities when assessing the “suitability” of all members of the management body and extend also to key function holders.

The “suitability” of the members of the management body of the credit institution is the degree to which such persons have good repute and sufficient experience to fulfil their duties as members of the management body. The Guidelines set out the criteria for the assessment of experience and reputation and documentation requirements for credit institutions.

The Guidelines also recognise that it is important that credit institutions and competent authorities intervene effectively in cases where a member of the management team is not considered suitable. The Guidelines contain measures that can be taken where a member is not considered suitable such as ordering actions to improve the knowledge of a member or to shift responsibilities, the prohibition to continue performing tasks, temporary ban or replacement of single members of the management body to ultimately the withdrawal of the credit institution's authorisation. 

The Guidelines should be complied with by competent authorities and credit institutions by 22 May 2013.