Extra attention for strategy, conduct and risk management of financial institutions

Press release
Date 14 February 2011

Supervision of strategy and conduct, embedment of new supervisory frameworks, better risk management and sharper focus on and also behind the figures – these are the arrowheads of DNB’s 2011 supervision programme, which is discussed in the brochure DNB Supervision Themes 2011 published today. The 2011 supervisory themes are closely linked to the Supervisory Strategy 2010-2014 and with the Action plan for a cultural change in DNB's supervision.

Corporate models and strategy

One important lesson taught by the crisis is that supervision must be more forward-looking. This is why in 2011 DNB will be assessing banks’ corporate models and strategies more intensively, partly by taking a closer look at concentrations on the asset side of their balance sheets. As regards insurers, DNB will be appraising the economic profitability of life insurance products. DNB further focuses on reinforcement of the resilience of pension funds and the improvement of directors’ focus on financial risks.

Conduct and culture

The conduct and culture of financial institutions greatly impact operational control. In 2011, DNB will perform various thematic examinations in this area, continue on its path of intensified supervision of financial institutions’ remuneration policies and aim to increase board effectiveness.

Embedment of new supervisory frameworks

DNB also makes institutions aware of adjustments to regulations. The introduction of Basel III for banks leads to stricter capital and liquidity requirements. DNB monitors adequate implementation of both CRDs alongside preparations for Basel III. In addition, a supervisory framework for systemically relevant institutions is being developed. Insurers need to prepare in time for the implementation of the new Solvency II requirements, which will become effective in the coming years. DNB will furthermore contribute to the revision of the Financial Assessment Framework for pension funds.

Improved supervision through better data

Crucial to the effectiveness of supervision is the quality of the figures reported by financial institutions. Besides, DNB will focus more on the information underlying these data.