The Minister of Finance has informed the Second Chamber of parliament in a letter (in Dutch) on plans and measures announced or taken since the publication on 10 July 2009 of the Cabinet’s view (in Dutch) on the future of the financial sector. The letter contains a schedule showing what stage the announced measures are at.
The Minister writes in his letter that restoring trust in and stability of the financial sector is first and foremost the responsibility of the financial institutions themselves. A first step is the creation of the Advisory Committee on the Future of Banks and adoption of the Banking Code. In addition, the Minister believes that supervision should be increased and widened on a number of points. He mentions the following concrete measures:
- the implementation of the amendments to the Capital Adequacy Directive;
- the principles for a controlled remuneration policy of the Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank;
- the Dutch Central Bank’s new “Macroprudential analysis” division and the formation of the European Systemic Risk Board;
- an expedient approval in Europe of the new accounting standard, IFRS 9, which will replace a part of the existing rules for the valuation of financial assets;
- extending supervision to credit rating agencies, private equity and hedge funds, and over-thecounter derivatives trade;
- the legislative programme of the EU, the creation of colleges of supervisors, and agreeing on the sharing of the costs of crossborder crisis management.
Last, the government will have to carry out reforms and, in particular, strengthen crisis management. In that connection, the Minister mentions the timeliness, transparency and predictability of intervention on the basis of an “intervention ladder”. He also discusses a number of instruments that he wants to develop further: ? the living will: a dynamic document which is drawn up by the financial institution itself in order to be better prepared for stress situations.
- the introduction of convertible hybrid capital, which has to be converted into shares at a previously defined moment;
- temporary limitation of the rights of corporate bodies;
- revision of the deposit guarantee system.
It is preferable that international agreement is reached on these new instruments. The Netherlands will make efforts to achieve this.