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ECB’s Consultation On Internal Governance: A Strategic Shift In Banking Regulation

by THEFUTURE.TEAM

July 25, 2024

The European Central Bank (ECB) has launched a public consultation on a new internal governance and risk culture framework for banks, reflecting the institution’s supervisory priorities under the Single Supervisory Mechanism (SSM). This initiative underscores the ECB’s commitment to ensuring robust management practices within European banks, aiming to mitigate the systemic risks highlighted by the global financial crisis and subsequent bank failures.

Enhanced Governance Standards

The proposed framework replaces the 2016 SSM supervisory statement, providing a comprehensive roadmap for banks to establish more effective internal governance structures and risk cultures. It delineates supervisory expectations regarding the composition and function of banks’ management bodies and committees, the roles and responsibilities of internal control functions, and the significance of a strong risk culture.

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This update incorporates the latest standards from the European Banking Authority (EBA) and showcases best practices identified by the ECB over the years. By setting clear guidelines, the ECB aims to standardise governance practices across the banking sector, fostering stability and resilience.

Addressing Governance Shortcomings

Historical shortcomings in governance and risk culture have often led to significant difficulties for banks, as evidenced during financial crises. Poor decision-making processes can result in imbalances between risk-taking and risk control, posing capital risks and undermining banks’ operational resilience. The ECB’s new guide seeks to address these issues by promoting balanced and well-informed decision-making frameworks within banks.

Ongoing Monitoring and Enforcement

Despite notable progress, the ECB stresses that banks must continue enhancing their governance standards. The central bank will intensify its supervisory scrutiny and employ all available tools to ensure compliance with the new guidelines. This proactive stance is crucial for preempting potential governance failures and maintaining the stability of the European banking sector.

Public Consultation and Stakeholder Engagement

The consultation period, which concludes on 16 October 2024, invites feedback from various stakeholders, including experts from supervised institutions. A stakeholder meeting scheduled for 26 September 2024 will facilitate direct dialogue between the ECB and banking professionals, ensuring the final framework reflects a comprehensive understanding of industry perspectives.

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Competition Authority Launches Comprehensive Review of ExxonMobil Cyprus Acquisition

by THEFUTURE.TEAM

September 16, 2025

Investigation Initiated Over Strategic Acquisition

The Competition Protection Authority has commenced a thorough investigation into the acquisition of ExxonMobil Cyprus Limited’s share capital by Petrolina Holdings Public Ltd through Med Energywise Ltd. This inquiry was formally initiated following a session held on 10 September 2025, after an in-depth review of the pertinent report by the Authority’s Service.

Concerns Over Market Compatibility

Authorities have expressed serious concerns regarding the compatibility of the transaction with established competitive practices. The review indicates that the acquisition may affect several critical petroleum markets, both horizontally and vertically, thereby raising the potential for adverse impacts on market dynamics.

Horizontal Market Dynamics

On the horizontal front, potential effects have been identified in the import market for petroleum products, as well as in both wholesale and retail distribution channels of these products. The consolidation is believed to increase the risk of price rises and coordinated actions, given the direct competitive proximity between Petrolina and ExxonMobil.

Vertical and Adjacent Market Implications

Vertical aspects of the merger are also under close scrutiny. The new entity could restrict competitors’ access to critical infrastructure such as storage facilities, supply channels, and customer bases. These restrictions could further affect the onshore distribution of fuels, the wholesale market for lubricants, and specialized technical services connected with fuel station operations.

Local Market Considerations

Particular attention is being paid to the potential concentration in the retail fuel market. The investigation suggests that a reduced competitive landscape within a four-kilometer radius of the companies’ fuel stations could lead to diminished local competition, adversely impacting consumer prices and options.

Next Steps and Industry Impact

The Competition Protection Authority, which reached a unanimous decision to pursue a full investigation, remains open to submissions from parties that might be affected by this transaction, as mandated by current legislation. A final decision is expected within four months upon receipt of all necessary evidence, potentially setting a significant precedent for future market consolidation cases in the energy sector.