Lending by foreign-based banks dilutes the effectiveness of capital-based measures. [13] Moreover, our current tools are bank-based and therefore exercise little control over the growing role of the non-bank financial sector in lending to households. For example, in the Netherlands around a third of mortgage lending to households is now provided by pension funds, insurers and mortgage funds.
All in all, European banks have seen an increase in the number of formally independent board members over the past few years, even though some banks lag behind. In Germany in particular, supervisory boards and shareholders are prone to doubts and misunderstanding in this respect. What do supervisors really expect as regards independence?