29th January 2014

Government passed an amendment to the Bank Supervision Act

At its last session on 22 January, the interim Government passed an amendment to the Bank Supervision Act. The amendment transposes some EU directives (inter alia CRR/CRD IV – capital requirements directive) (further, there are minor changes in the system of building society saving). The EU directives primarily stipulate obligatory requirements on banks (even foreign branches) in terms of keeping capital reserves as stipulated by the so-called Basel III system (the system of Common Market bank supervision). Principles of corporate governance are introduced in order to prevent managers risking any inconvenient transaction (the risk of the transaction should be taken into account). The amendment also regulates the process of bank supervision that shall be conducted by the Czech National Bank (CNB). The cooperation among member states of the EU is ensured.

Besides that, the amendment also introduces a requirement for any financial institution to protect whistleblowers (any notifiers of malpractice) within the company. The malpractice is conceived as any breach of the CRR (Capital Requirements Directive). A notifier may be a member of staff, a trade unions member. The CNB should also oversee financial institutions in fulfilling these duties.

The Bill is heading to the Chamber of Deputies. For further information, click here.

Members of the American Chamber of Commerce in the Czech Republic