DNB Publishes Enforcement Policy For Breaches Of Capital Requirements

The Dutch Central Bank (DNB) has introduced a new enforcement policy that significantly tightens its approach to capital and liquidity requirements. The policy provides for faster formal action, a higher risk of escalation and a default use of penalty payment orders when a shortfall is identified. Institutions subject to capital and liquidity requirements should expect quicker supervisory intervention and narrower room to resolve issues informally.

The new enforcement policy in brief

Under its new enforcement policy, when a breach of capital or liquidity requirements is identified, DNB will in principle immediately initiate a formal enforcement procedure. This will generally result in the imposition of a penalty payment order (last onder dwangsom). These measures are aimed at achieving recovery as quickly as possible. DNB may also impose an administrative fine.