The European Central Bank (ECB) supervises all large banks in Europe. Examples of Dutch banks include ING, ABN AMRO, Volksbank and Rabobank. De Nederlandsche Bank (DNB) contributes to European banking supervision. Together with supervisory authorities in other European countries, we work to safeguard a secure and stable financial sector.
The large banks are under direct supervision by the ECB, while the smaller banks are supervised by the national supervisory authorities, such as DNB. The ECB supervises more than 110 large banks across Europe. Combined, they hold just over 80% of all banking assets in Europe. They include seven Dutch banks: ING, Rabobank, ABN AMRO, De Volksbank, BNG Bank, NWB Bank and Leaseplan.
The ECB and national supervisory authorities like DNB contribute to European banking supervision in the Single Supervisory Mechanism. Together they are committed to safeguarding a safe and stable European banking sector. The Single Supervisory Mechanism is one of the two pillars of the banking union of the European Union (EU). The second one is the Single Resolution Mechanism .
In practice, European banking supervision is always a team effort. Joint Supervisory Teams (JSTs) are assembled for each large bank, which are headed by the ECB. Our supervisors participate in the JSTs for Dutch large banks and for large banks in other European countries. The ECB and the national supervisory authorities jointly set the priorities for European banking supervision. They also determine the supervisory action needed for each bank and take action if anything goes wrong.
We typically conduct our day-to-day supervision remotely. Our supervisors maintain close contact with banks, and the reports which banks submit several times a year allow them to assess the banks’ financial health. In addition, the ECB and DNB may commission special on-site inspections. This means that a supervisory team, whose members can be from various countries, installs itself at a bank for several weeks or months to conduct an inspection. For example, it could look specifically into credit risks or risk management, going through all the files in detail. The ECB submits recommendations to the bank following an inspection.
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New European fiscal rules entered into force in April. Although more realistic, they are far-reaching, especially for high-debt countries. Whether they prompt Member States to reduce over-indebtedness will depend on compliance and enforcement.
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‘Monetary policy credibility does not come overnight. It has to be earned. Again and again.’ , said Klaas Knot in his speech at Koç University, Istanbul. He spoke about the need for independent central banks to face the challenges of our times.
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After the ECB's balance sheet grew substantially for years as a result of its government bond purchases and lending operations, it has been shrinking again for the past year and a half. This has consequences for the implementation of monetary policy.
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