The EACB welcomes the opportunity to submit its comments to the EBA and ESMA on its draft guidelines on the suitability assessment for banks, as fit and proper rules and governance are of particular importance for cooperative banks.
Cooperative banks’ governance is built on democracy, transparency and proximity, with elected members in the supervisory function who bring strong knowledge of the regional economy and are specifically trained for their role. This model is a key source of diversity and resilience in the European banking sector and must be preserved when designing and applying suitability frameworks.
From the EACB’s perspective, the revised Guidelines and RTS should remain strictly within the mandate and concepts set out in CRD6, fully respect national company and cooperative law, and distinguish clearly between the management body in its management and supervisory functions. The assessment of suitability is primarily an institutional responsibility, and Level 2 and Level 3 texts should not introduce new obligations or concepts (such as formal independence, extended key function holder powers, or detailed individual competence requirements in areas like ESG, ICT or AI) that go beyond the Level 1 framework or conflict with cooperative specificities such as collective responsibility and elected, member-based governance.
The EACB is also concerned that the draft texts appear to move in the opposite direction to the EU Better Regulation and simplification agenda. Instead of streamlining and removing redundant or low‑value requirements, they tend to add new layers of detail, expand reporting and documentation expectations, and risk increasing operational burden without clear prudential benefit, potentially undermining competitiveness and making it harder to attract diverse, skilled profiles to governing bodies. Detailed, comments and drafting suggestions to address these concerns are included in the attached paper.