Before De Nederlandsche Bank (DNB) may grant dispensation from liquidity testing and reporting for branches with registered office in another EEA Member State operating in the Netherlands several conditions must be met. One of these conditions is written confirmation of the home supervisor of the bank (hereafter the firm) that the branch is part of.
As a minimum requirement this confirmation must include the following:
- the firm is subject to consolidated supervision, including liquidity supervision by the home supervisor, which includes the activities of the Dutch branch;
- the home supervisor is satisfied with the liquidity and operational arrangements and risk management of the firm including the size and composition of the liquidity buffer in relation to the liquidity risk run by the firm;
- the home supervisor does not object to the commitment from the firm to unconditionally support the liquidity needs of the Dutch branch;
- the home supervisor will inform DNB promptly in the event the firm fails to meet the home supervisor’s liquidity rules;
- the home supervisor is willing to discuss and consider DNB’s views regarding the liquidity position of the firm;
In addition to the above minimum required content of the confirmation letter to DNB by the home supervisor, DNB may require additional firm-specific confirmations as part of the confirmation letter.
DNB will take the application for the dispensation of liquidity testing and reporting into consideration only after both the confirmation letter from the firm as well as the confirmation letter from the home supervisor have been received. Providing DNB with the confirmation letters does not imply that the conditions for granting dispensation are met. DNB will judge the application taking into account firm specific circumstances.