Over a decade of research on behaviour and culture at banks. Much has improved, but executive and supervisory board members can become even more effective by devoting more time and attention to reflection.
Behaviour and culture
De Nederlandsche Bank (DNB) began supervising behaviour and culture at financial institutions in 2011. A lot needed to happen: a vast number of incidents at banks made clear that effective operational management depends on more than just healthy financial figures. Adverse behaviour was often the cause of persistent problems, which damaged trust in the financial sector. What do things look like today? Have there been significant changes?
Conclusion
The main conclusion of DNB researchers Ingeborg Rademakers and Melanie de Waal[i] is that things have certainly improved, but there is still a lot of work to do. The researchers: ‘This report is part of a long-term study that enables us to draw comparisons over several years, including with the preceding period. We see that emphasis on behaviour and culture is more embedded in the financial sector than a decade ago.’
Lengthy process
‘Banks and other institutions have set up entire departments for this purpose, there are boardroom evaluations and culture features prominently during meetings. It can be a lengthy process, though: you can't just press a button and expect everything to be perfect. Moreover, things are certainly not going well everywhere. Too often managers still revert to what we call the short-term “action reflex”.’
[i]Ingeborg Rademakers and Melanie de Waal no longer work at DNB. Ingeborg has retired and Melanie has taken a new position at the Monetary Authority of Singapore.
Dutch households are putting more and more money in bank accounts abroad, according to the latest quarterly figures from DNB and the ECB. Countries where savings rates have recently risen are particularly popular among Dutch savers.
In the area of Interest Rate Risk in the Banking Book (IRRBB) newly introduced reporting schemes for significant institutions (and a few less significant institutions) will be added to the existing reporting.
Supervisory authority De Nederlandsche Bank (DNB) is submitting a new anti-money laundering approach to financial institutions and other stakeholders as part of a public consultation. In a policy document presented today [...]
On 31 May 2023, we announced an increase in the countercyclical capital buffer (CCyB) to 2%. Accordingly, banks with loans outstanding in the Netherlands must comply with this requirement by 31 May 2024. Since this announcement the risk environment has not changed substantially.