Stable financial network
The financial world is a network of banks, insurers, pension funds and securities firms. If through a malfunction or malicious intent a financial institution runs into financial difficulties, it may drag down others in its fall. DNB therefore continuously monitors financial institutions and the network they operate in. If anything goes wrong, DNB will take measures to minimise the harmful effects. However, supervision by DNB provides no guarantees. The chance, how ever small, that an institution may fail cannot be eliminated entirely.
International co-operation
Financial services do not stop at national borders. Many Dutch banks and insurers provide their services internationally. A hitch in the payment system or the failure of one single bank may be enough to spark off an economic crisis. This is why international co-operation between financial supervisors is absolutely vital to the promotion and maintenance of a healthy financial system.
Authorisation
Not everyone is allowed to provide financial services. To operate in this sector a firm needs authorisation by DNB. Such authorisation will be granted on condition that the enterprise is financially healthy (solvent) and observes principles of sound operational management. Transgression against the rules may lead to sanctions. If a firm persists in breaking the rules, DNB may withdraw its authorisation.
Another supervisor: the AFM
Besides DNB, there is a second financial supervisor, called the Netherlands Authority for the Financial Markets (AFM). The AFM supervises the way financial institutions deal with their customers. Institutions are not allowed, for example, to provide misleading information to consumers.
