- Regulation of banks — Investment business
This chapter looks at corporate governance of banks. Banks within the European Economic Area (EEA) are subject to the Capital Requirements Directive (CRD IV), which contains provisions on the composition of the board, the quality requirements imposed on executive directors and supervisory directors, the integrity of business operations, and the structure of the group. Banks also have to meet the objectives of the Bank Recovery and Resolution Directive (BRRD), including the overarching requirement to become and remain ‘resolvable’. A bank is resolvable if its balance sheet can be restructured effectively in order to protect the continuity of critical functions, avoiding any significant adverse effect on the financial system and without the support of public funds. The chapter then analyses the resolvability requirement from an EU perspective and explores the impact it will have on the structure and governance of systemically important banks.