General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
June 12, 2017

DNB introduced a new approach for Pillar 2 liquidity requirements for less significant institutions (LSIs). This approach includes the introduction of a survival period requirement and a net stable funding ratio (NSFR) requirement. The new requirements will be applied starting from the supervisory review and evaluation process (SREP) in 2017.

DNB had reviewed its methodology for determining Pillar 2 liquidity requirements, which led to the development of this new approach. DNB decided to replace the former grace period with a new six-month survival period requirement. The survival period requirement entails that a credit institution needs to ensure that it can continue operating for at least six months and meet all its payments due under the assumed liquidity stress scenarios. This requirement is based on the outcome of the internal stress test of the credit institution, which should capture the vulnerabilities of the specific institution. Apart from the survival period, an LSI will be required to maintain a minimum NSFR of 100%, thus ensuring the stability of the institution’s funding profile. The new requirements will become applicable via the SREP letter that credit institutions will receive as part of their next SREP. DNB expects an LSI to calculate and monitor its survival period and its NSFR at least on a monthly basis.

 

DNB should be notified by an LSI in case its survival period drops below 7 months. In addition, while DNB already receives information on the NSFR via regulatory reporting, DNB should also be informed when the NSFR falls or is expected to fall below 100%. For the institutions that do not meet the requirements when they come into force, institution specific arrangements will be made to become compliant. With this new approach, DNB follows the EBA guidelines on common procedures and methodologies for the SREP (EBA/GL/2014/13). These guidelines give competent authorities the possibility to set such minimum Pillar 2 requirements.

 

Related Link: DNB Notification

Keywords: Europe, DNB, Netherlands, Pillar 2, Survival Period, NSFR, SREP, LSI, Banking

 


Related Insights
News

CBB Proposes and Finalizes Rulebook Modules for Banks in November 2018

CBB announced the issuance of new leverage ratio requirements under Module CA (Part 3) for Islamic (Chapter CA-10) and conventional bank licensees (Chapter CA-15).

November 15, 2018 WebPage Regulatory News
News

OFR on Financial Stability Risks in Its 2018 Annual Report to Congress

OFR released its 2018 Annual Report to Congress, which examines risks to the financial stability in the United States.

November 15, 2018 WebPage Regulatory News
News

IAIS Publishes Drafts of Revised ICP 8, ICP 15, ICP 16, and ICP 20

IAIS published the drafts of revised Insurance Core Principles on Public Disclosure (ICP 20), Investments (ICP 15), Enterprise Risk Management for Solvency Purposes (ICP 16), and Risk Management and Internal Controls (ICP 8), along with a revised draft of the glossary on enterprise risk management (ERM).

November 14, 2018 WebPage Regulatory News
News

MAS Amends Notice 637 on Capital Adequacy Requirements in Singapore

MAS published the final, revised Notice 637 on the risk-based capital adequacy requirements in Singapore.

November 13, 2018 WebPage Regulatory News
News

ESMA Updates Q&A on Implementation of CSD Regulation and MAR

ESMA updated questions and answers (Q&A) documents on the implementation of the Central Securities Depository (CSD) Regulation and Market Abuse Regulation (MAR).

November 12, 2018 WebPage Regulatory News
News

FSB Finalizes and Publishes the Cyber Lexicon

FSB published a cyber lexicon, following the public consultation earlier this year.

November 12, 2018 WebPage Regulatory News
News

SRB Updates Liability Data Reporting Template for 2019

SRB published version 2.7.1 of the Liability Data Reporting (LDR) Template.

November 12, 2018 WebPage Regulatory News
News

ECB to Conduct Comprehensive Assessment of Six Bulgarian Banks

ECB will undertake a comprehensive assessment of six Bulgarian banks. The exercise, comprising an asset quality review and a stress test, follows Bulgaria’s submission of a request to establish close cooperation with ECB on July 18, 2018.

November 12, 2018 WebPage Regulatory News
News

SRB Publishes the Work Program for 2019

SRB published the work program for 2019, which sets out its priorities and core tasks for the year ahead.

November 12, 2018 WebPage Regulatory News
News

IMF Publishes Reports on the 2018 Article IV Consultation with Chile

IMF published its staff report and selected issues report under the 2018 Article IV consultation with Chile.

November 09, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2211