'New strategy, new faces'

Date 31 May 2012

'Banks will notice that we are increasingly focusing our capacity on problems.' An interview with Petri Hofsté, Director of Banking Supervision.

Petri Hofsté

>Every bank will be classified in one of five supervision categories. How will DNB go about assigning them?

'We’ll be using supervision categories 2 to 5 for banks. Our decision to work with supervision categories is linked to our new supervisory strategy, entitled ‘Focus!’ The classification was made on an a priori basis, using criteria that determine the degree to which the institution has an impact on the goals of our supervision: financial stability, solidity and integrity of the institutions. When making this classification, we are concerned with the impact rather than the specific risks associated with an institution. In the weeks to come, we will be holding consultations with all the banks on this and the other changes in supervision.'

What changes will my bank notice?

'Banks will notice that we are increasingly focusing our capacity on problems. The large and medium-sized banks will be placed in the highest categories: for these banks, we will be applying an institution-specific supervision approach. For the lower categories, we will use a portfolio approach, targeting problems experienced by groups of institutions rather than addressing each bank individually. However, the portfolio approach does not automatically mean that we’ll be devoting less attention to small banks. But we’ll be concentrating much more specifically on the problems experienced by the relevant category of institutions and will therefore be exploring these problems in greater depth. This will make it easier for us to compare how institutions are doing and to provide a more focused response where necessary.'

Will I be seeing more of my supervisor?

'That largely depends on what is happening at any given time. If, for example, there is a specific problem affecting a particular category of institutions, you may well see increased visits from the supervisors. But if there are no specific issues, the frequency of these visits will decrease.'

Will DNB publish which category a bank has been assigned to?

'No. We will only notify the institution itself.'

Is the initial classification permanent and fixed?

'No. The supervisor will review it annually, as well as in the interim following special transactions such as a merger or a major restructuring operation.'

Will my bank retain its designated team of supervisors?

'Many banks will see new faces in the supervision team but will certainly also continue to see some familiar ones. Naturally we will ensure a good handover to guarantee continuity. At the same time, all banks will receive more frequent visits from other representatives, in addition to their designated contacts. These are our experts who will be addressing specific issues.'

More information?

For more information about the new supervisory strategy, visit this link