28 June 2013 the Commission on the Structure of Dutch Banks (the "Commission") published its report "Towards a serviceable and stable banking system". The Commission analyses the current stance of affairs in the Dutch banking landscape and provides eleven recommendations to improve serviceability and stability of the Dutch banking sector.

International developments

Following the start of the financial crisis in 2007, a separation between retail banking activities and merchant banking activities has been considered on various levels. In the US, the Volcker Rule has been introduced as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Volcker rule boils down to a ban on trading for own account for deposit taking banks. In the UK, the Independent Commission on Banking chaired by John Vickers recommended to separate deposit taking business from merchant banking activities. On a European level in October 2012 similar recommendations were made by the European Commission’s High-level Expert Group on Bank Structural Reform headed by Erkki Liikanen.

Appointment and instruction of the Commission

In April 2012, the Dutch Minister of Finance published 40 measures aimed at reforming the financial sector in the Netherlands. Consequently, the Commission on the Structure of Dutch Banks was appointed. Herman Wijffels, member of the Liikanen Group, former Chairman of the Social-Economic Council (Sociaal-Economische Raad) and former CEO of Rabobank, was appointed Chairman of the Commission.

The Commission was instructed by the Dutch government to investigate a) the possibilities to implement the recommendations of the Liikanen commission in the Netherlands and b) how to improve the possibilities to smoothly resolve Dutch banks in case of an emergency. In its investigation the Commission was requested to take into account the serviceability desired form banks, the urge to regain confidence of society, the European and national legislative framework and cost efficiency of measures proposed.

The Dutch Government has indicated that it will respond to the Commission's report following the Parliament's summer recess.


In its report, the Commission first addresses developments over the last two decades in the Dutch banking sector, including measures already taken following the financial crisis. The Commission consequently describes serviceability and stability desired for banks and reforms needed to achieve such  serviceability and stability.

Pursuant to the Commission, serviceability means that Dutch banks provide for all products and services required with a view to the development of the internationally orientated Dutch economy, its citizens and its enterprises. An important pre-condition for serviceability is adequate competition, which actually has decreased in the Dutch banking landscape following the financial crisis. Alternative financing methods such as credit unions (kredietunies), crowd funding and SME bonds (MKB-obligaties) are also considered to contribute to adequate competition by the Commission.

The Commission view stability as Dutch banks being able to effectively fulfilling their economic functions and being shock proof. In order to increase stability and limit the risk profile of Dutch banks, the Commission proposes a number of measures, which are partially in line with European initiatives.

The recommendations to the Dutch Government and the Dutch banking sector in the report of the Commission will be discussed below.


  1. Towards a serviceable and stable Dutch banking sector

Strive for a serviceable and stable Dutch banking sector. This means that banks must be structured in such a way that future risks of banks calling for state aid are reduced. Furthermore, banks should avoid risks not stemming from servicing clients.

  1. Diversification

The banking sector needs to get as diversified as possible, in order to ensure adequate competition. In the view of the Commission both specialised banks, as well as universal banks offering a wide variety of services are needed.

  1. Strengthening of competition

Competition needs to be further increased by:

  • privatising state owned banks as soon as circumstances allow the State to do so;
  • removing the financing advantages of systemic owing to their implicit government guarantee;
  • completion of the European banking union;
  • policy making and legislative initiatives aimed at stimulating alternative financing methods such as credit unions, crowd funding and SME bonds;
  • introduction of comprehensible standard versions of high impact retail products (such as mortgage loans and savings for pensions).
  1. Strengthening of governance

The role of supervisory boards of Dutch banks needs to be increased by ensuring their members have more sector-specific knowledge and ensuring their members spend  more time in the fulfilment of their tasks.

  1.  Reforms of the Dutch residential mortgage loans market
  •  setting up a national mortgage institute allowing institutional investors to invest in mortgages and as such contributing to better availability and pricing of Dutch residential mortgage loans;
  • decreasing the loan-to-value ratio for residential mortgage loans to 80%, resulting in customers having to find other means to finance the remaining 20% of their residential properties (which although customary in some other EU jurisdictions, would mean a significant decrease of the LTV-ratio allowed in the Netherlands);
  • targeted restructuring of the housing market (such as a reform of the tax treatment of residential mortgage loans);
  • introduction of "mortgage saving", allowing first time buyers on the Dutch residential property market to use part of their pension savings to acquire such residential property.
  1. Strengthening of capital buffers

Improving the stability of banks by increasing the capital buffers they need to maintain. In the view of the Commission this entails amongst others that any bank becoming subject to direct ECB supervision should comply with Basel III requirements at that same point in time.

  1. Bail-in

Strive for a bail-in system for banks at an EU-level. Such bail-in system should result in losses of a bank being attributed to its creditors instead of to the state. Creditors claims should be written-off or converted into financial instruments in case of emergency.

  1. Ringfencing of trading activities

Trading activities exceeding certain thresholds should be legally, economically an operationally ringfenced from other banking activities, such as deposit taking. This is  in line with recommendations of the Liikanen Group, which means that trading activities should be ringfenced if they exceed 15 to 25% of a bank's balance sheet total or EUR 100 billion as well as exceed a pre-determined ratio between trading assets and balance sheet total.  Furthermore, Dutch banks should refrain from trading for their own account.

  1. Living-will

Dutch banks need to be organised in such a way they can be easily resolved in case of emergency, whereas their systemically relevant activities can be separated and continued.

  1. Resolution mechanism

In forming the European banking union, simultaneous introduction of European supervision and a resolution mechanism should be aimed for.

  1. Social statute

Dutch banks should draw up a social statute reflecting their views on how to increase serviceability and stability. Such social statute should be made subject to a public dialogue.