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.