In a speech delivered at a recent European Central Bank (ECB)/European University Institute seminar, Anneli Tuominen, a member of the ECB's Supervisory Board, emphasized the vital role of good governance and sound risk culture in navigating the challenges facing the banking sector today.
"We saw in the global financial crisis and in last year's banking sector turmoil that deficiencies in internal governance and risk culture can often be early warning signs of turbulence ahead," she said. Tuominen stressed the importance of individual suitability within, and collective suitability of, management bodies. At an individual level, institutions should comprehensively assess members' knowledge, skills, and dedication. At a collective level, organizations should ensure management bodies possess diverse expertise and effective challenge capacity to enable proper oversight.
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