IMF Staff Country Reports

Kingdom of the Netherlands-The Netherlands: Financial Sector Assessment Program- Technical Note on Banking Supervision

Publication Date:

June 18, 2024

Electronic Access:

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Summary:

Supervision of less significant institutions (LSIs) is effective in the Netherlands. The De Nederlandsche Bank’s (DNB) supervisory approach to LSI supervision is intrusive and transparent. It builds on well-developed supervisory tools which support strategically focused, ongoing supervisory dialogue with banks. The supervisory framework blends the robust SSM/EU framework with Dutch elements, enriching the spectrum of supervisory techniques and tools. The LSI supervisory capacity is founded in a solid knowledge base of a broader DNB and it is used to cover critical topics, which include, (i) comprehensive and thorough assessments of risk managements’ outcomes, (ii) deep dives into governance, behavior and culture and (iii) the development of the nature risk agenda. DNB and the Autoriteit Financiële Markten (AFM), a conduct supervisor, cooperate very closely while complementing prudential and conduct supervision, to tackle central issues, including Interest-Only (IO) Mortgages. DNB’s LSI supervision also factors-in macroprudential deliverables. Furthermore, the supervisory process relies on strong enforcement and thorough licensing processes, on side of DNB. A vigorous governance of DNB’s LSI supervision includes 2nd and 3rd lines of defense.

Series:

Country Report No. 2024/168

Subject:

Bank supervision Credit risk Financial institutions Financial regulation and supervision International organization Liquidity requirements Loans Monetary policy Mortgages

Frequency:

regular