As of 17 September 2020, banks have been permitted to temporarily exclude certain central bank exposures from the calculation, reporting and disclosure of what is known as the leverage ratio.Read more
Climate-related risks are now a part of fit and proper assessments
Financial institutions must increasingly factor in the risks related to climate change and the transition to a carbon-neutral economy. We have therefore integrated these topics into fit and proper assessments for banks, insurers and pension funds.
- Climate-related and environmental risks will feature more prominently in our assessment interviews. We may ask a candidate about their knowledge of such risks, relevant legislation and their impact on the institution.
- The institution must include in the assessment file it submits information on the candidate's knowledge and experience with regard to such risks. It may do so while describing its appointment considerations and decision, or include this in its notes to the modified suitability matrix, or both. See Fit and proper assessments
In assessing fitness, we use the criteria listed under A through E in the Policy Rule on Fitness 2012. For example, we expect a proposed management or supervisory board member or other policymaker or co-policymaker to be able, with respect to climate-related and environmental risks, to:
- be able to define these risks
- be aware of relevant laws and regulations and of reporting obligations
- be able to identify, monitor and manage them
- know who is responsible for managing them in the institution
- understand their impact within the institution's specific context, and to be able to cite examples
- be able to formulate a strategy and policies to tackle them
- take responsibility for ensuring their adequate management
- in the case of supervisory board members: to monitor their adequate management
- have sufficient relevant competencies, such as a helicopter view, leadership, autonomy, sensitivity to their environment, strategic guidance and sense of responsibility.
In our assessment we take into account the candidate's proposed position, the institution's nature, size, complexity and risk profile, and the composition and functioning of the board as as whole. We expect a management board member responsible for risk management to have more in-depth knowledge, experience and competencies in the areas listed above than a board member with more general areas of responsibility.
If you wish to know more about how we address climate-related and environmental risks as part of our fit and proper assessments, feel free to contact our Expert Centre on Fit & Proper Assessments by email at firstname.lastname@example.org.
- Clearing & Settlement Systems
- Clearing institutions
- Collective investment schemes
- Crypto service providers
- Electronic money institutions
- Exchange transaction
- Investment firms
- Payment institutions
- Pension funds
- Premium Pension institutions
- Trust offices
Under the Financial Supervision Act (Wet op het financieel toezicht – Wft), payment institutions and electronic money institutions must submit the following within six months of the end of the financial year, i.e. no later than 30 June 2021 for the 2020 financial year:Read more
Under Article 95(2) of (EU) Regulation 2015/2366 (PSD2), payment service providers must submit an assessment of their operational and security risks to the supervisory authority on an annual basis.Read more