Dutch insurers continue to invest less in bonds
Insurers in the Netherlands continued to sell direct investments in bonds in 2023, new figures from DNB show. For the fourth year in a row, insurers sold more bonds than they bought.
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De Nederlandsche Bank (DNB) determines in advance how it will intervene in a bank that gets into difficulty. The bank must remove any obstacles to such intervention. This process is known as resolution planning. Resolution planning ensures that both DNB and the banks are better prepared for a possible crisis, thereby reducing the impact of a bank's failure.
We draw up a resolution plan for each bank. It describes how we may intervene if a bank is in difficulty. It includes:
A resolution strategy includes the following points:
A bank’s operational and financial continuity is crucial for us to be able to implement the resolution strategy. The resolution plan states, for example, which ICT systems must continue to operate. Sufficient liquidity must also be guaranteed during and after resolution.
If a bank fails and goes into resolution, it must have sufficient “loss absorbing capacity”. This is necessary to absorb losses and recapitalise the bank with the aid of the bail-in tool. Since 2017, European resolution authorities have been able to impose on banks minimum required own funds and eligible liabilities (MREL). This safeguards a bank's loss-absorbing capacity. As of 1 January 2019, globally systemically important banks (G-SIBs) must comply with the total loss absorbing capacity (TLAC) standard of the Financial Stability Board (FSB), an international consultative body for the worldwide financial system.
Finally, we will assess whether the resolution plan is feasible in practice and whether there are obstacles to its implementation at the bank, such as an overly complex structure, non-marketable assets or an inability to supply certain information s promptly. If we identify an obstacle, the bank must eliminate it to ensure the feasibility of the resolution strategy.
DNB contacts a bank before we draw up its resolution plan to request the information we need. Once we have finished the plan, we share the overall conclusions with the bank.
Insurers in the Netherlands continued to sell direct investments in bonds in 2023, new figures from DNB show. For the fourth year in a row, insurers sold more bonds than they bought.
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