Role of the banking industry

Relation to the Dutch economy

The banking industry plays a central role in every economy. The Dutch economy, too, would be unable to function without the many forms of bank services. Banks extend loans to businesses and private persons, making it possible for them to invest. Furthermore, they handle payments and securities transactions, manage savings, and advise and guide enterprises when they go public. In fact, there is a package of products and services tailored to the needs of every individual. The aggregate balance sheet total, which amounted to EUR 2,807 billion as at the end of September 2005, underlines the banks’ economic importance. The banking industry is also a major employer, with a total work force in the Netherlands of about 110,000 and approximately 160,000 with Dutch banks abroad. Please refer to our annual report for an overview of the balance sheet total and the number of employees employed in the banking industry.

Relation to the regulatory authorities

It is important that the public’s trust in the banks remain inviolate. For this and other reasons, the Dutch central bank (De Nederlandsche Bank, DNB) sees to it that the banks operate in a sound and prudent way. With its system of licenses, and monitoring compliance, DNB ensures that banks meet certain minimum requirements. The regulators also supervise the integrity of the financial system and the management. Another regulatory body is the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM), which is in charge of the supervision of conduct of all financial institutions. Supervision in the Netherlands is of high quality.

Relation with the public authorities

As well as with the regulatory authorities, the banking industry also has to deal with the Dutch public authorities. Formal and informal consultations about a range of issues are held with the House of Representatives (Tweede Kamer). Consultations with ministers and officials at the various ministries, (notably the Ministries of Finance, Economic Affairs, Justice, and Social Affairs and Employment) are also an important activity. More and more recommendations, directives and regulations issued by Brussels demand attention. European bodies, such as the European Commission, the European Parliament, and the European Council are therefore also important focal points.

Relation to society

Corporate social responsibility or sustainable enterprise is a notion that has become an integral part of the banks business operations. Banks are aware of their position in society and focus their attention on a large number of issues that fall within NVB’s competence. These issues may be connected with environmental aspects, lending, payments, the banks’ contribution to the fight against terrorism and fraud and a range of other subjects. Growing demand for transparency and openness, too, is an important development where banks take the lead.