'We address risks in thematic examinations'

Date 28 July 2012

'Banks get a clearer picture of how they are faring compared to the benchmark'. An interview with Renate Pepels, head of the new Thematic Supervision department.

Renate Pepels

>Which thematic examinations are currently ongoing?

'We are, for instance, carrying out an examination of the reliability of the prudential reports compiled by banks. One example of the aspects we assess is whether legislation and regulations have been properly interpreted. We are also looking at compliance with integrity legislation, focusing specifically on Anti-Money Laundering/Customer Due Diligence, implementation of the remuneration policy, the functioning of the internal audit operation and the competence tests for supervisory board members of banks.'

When will you be introducing new themes?

'Probably in the autumn. We recently carried out our revamped risk analysis. Based on the outcomes, we will assess whether similar risks are occurring at several institutions; if so, we will address them in a new thematic examination'

Thematic examinations are nothing new at DNB. Why a new department for thematic supervision of banks?

'Under our new supervisory approach, Focus!, we will be deploying capacity where it is needed in a more targeted way. With that in mind, we've also adapted the organisation of our bank supervision. We have reduced the capacity in the account teams for banks and are using the capacity that has been freed up in two new functional teams: Thematic Supervision and Financial Risks & Analysis. In the past, the account teams were responsible for 'their' bank from start to finish; now, each of the new teams will carry out part of the activities. The teams will perform specialist research among all banks and will therefore be able to make comparisons and identify sector-wide trends.'

What will a thematic examination mean for my bank?

'You will receive more visits from different supervisors, such as the specialists from our department, for example. That will enable us to build up expertise based on the themes we examine.'

Will DNB publish the results of these examinations?

'Individual banks will always be sent a copy of our findings about their case. This will sometimes prompt them to ask "are we the only bank to score badly on this theme?". In the past, we weren't always able to answer that question. However, as we are now carrying out thematic examinations that cover several banks, we are able to give an indication of how the specific results compare with the benchmark, by publishing the average, anonymised results for the entire group. This will give banks a better frame of reference, and will also enable us to make our generic findings more widely available, for example through circulars, information meetings or sessions with advocacy groups such as the Dutch Banking Association. This can have a preventive effect.'