Today, De Nederlandsche Bank (the Dutch national bank) published its supervisory themes of 2010, aspects of the financial sector that will receive special attention.
One rationale of this approach is the need to restore faith in the sector, after the credit crunch, some special discussion topics (like excessive bonuses, irresponsible risk-taking and the sale of dubious financial products) and international discussions at the last G20 summit (also see here).
Another may be - well duh - to restore faith in the supervisory capabilities of DNB itself, as a pre-emptive strike against the pretty predictable outcome of the ongoing research by the investigative Committee De Wit into the financial crisis and the role played by DNB (for some background, go here).
The key issues for 2010, according to DNB that is?
Sounds promising, but there's a difference between saying and doing. We'll see in the course of this year whether it's mostly muscle-flexing, or actually involves some punching also by DNB. As the supervisor has some lost ground to make up for, I wouldn't be surprised to even see the gloves go off at some point. In the meantime, imagine Eye of the Tiger steadily getting louder in the background...
One rationale of this approach is the need to restore faith in the sector, after the credit crunch, some special discussion topics (like excessive bonuses, irresponsible risk-taking and the sale of dubious financial products) and international discussions at the last G20 summit (also see here).
Another may be - well duh - to restore faith in the supervisory capabilities of DNB itself, as a pre-emptive strike against the pretty predictable outcome of the ongoing research by the investigative Committee De Wit into the financial crisis and the role played by DNB (for some background, go here).
The key issues for 2010, according to DNB that is?
- There will be more focus on integrity and governance, in line with the approach taken in previous years. Besides dealing with actual behavior and culture in talks with financial institutions and through a number of in-depth investigations, DNB also plans to re-review pay policies (checking early this year whether these policies are in line with DNB principles and good practices).
- There will be more focus on those institutions that incline to move to the margins of tax regulation.
- There will be more focus on strategies and business models of institutions subject to DNB supervision, as these are subject of discussion in all sectors in this day and age (in part due to restructuring activities). DNB aims to prevent moves by institutions, geared towards unhealthy risk-taking in response to pressure for profit maximization by certain players (like investors and credit rating agency's). Coined as "a new search for yield" by DNB.
Sounds promising, but there's a difference between saying and doing. We'll see in the course of this year whether it's mostly muscle-flexing, or actually involves some punching also by DNB. As the supervisor has some lost ground to make up for, I wouldn't be surprised to even see the gloves go off at some point. In the meantime, imagine Eye of the Tiger steadily getting louder in the background...
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