NETHERLANDS Law and Practice Contributed by: Johannes de Jong and Juliet de Graaf, Osborne Clarke N.V.
• If only the bridge institution tool is used and only part of the assets are transferred, the bank and its remaining assets/activities shall be wound up under normal insolvency pro - ceedings. The asset separation tool • The DNB can transfer assets, rights or liabili - ties of a bank or a bridge institution to one or more asset management vehicles. This trans - fer does not require shareholder consent. • An asset management vehicle must be wholly or partially owned by one or more public authorities and controlled by the DNB. • The asset management vehicle will manage the assets transferred to it with a view to maximising their value through eventual sale or orderly wind-down. The bail-in tool • The bail-in tool is applied to absorb losses and recapitalise the distressed bank so that it once again meets its licence requirements. • The bail-in tool allows unsecured debt to be written down or converted to equity. That way, the creditors of a bank bear the losses and the need for a taxpayer bailout is avoid - ed. • The bail-in tool may be applied to all liabilities of a bank except for the liabilities excluded by the BRRD, which include covered depos - its, secured claims, claims with an original maturity of fewer than seven days, claims of employees, claims of commercial or trade creditors and claims arising from the provi - sion of goods or services to the bank that are critical to the daily functioning of its opera - tions, including IT services, utilities and the rental, servicing and upkeep of premises. • Once CET1 capital instruments have been wholly or partly written down, non-excluded liabilities are written down or converted into
rights to newly issued shares or other instru - ments of ownership of the bank. • For bail-in, the “no creditor worse off prin - ciple” applies, meaning that shareholders and creditors may not incur greater losses than they would have incurred if the bank had been wound up immediately beforehand under normal insolvency proceedings. Minimum Requirements for Own Funds Banks are subject to minimum requirements for own funds and eligible liabilities (MREL). The MREL serve to ensure that a bank maintains at all times sufficient eligible instruments to facili - tate the implementation of the preferred resolu - tion strategy. MREL is the European equivalent of worldwide Total Loss Absorbing Capacity standard (TLAC) developed by the Financial Stability Board (FSB). In 2024, certain MREL requirements in BRRD were amended pursuant to Directive (EU) 2024/1174. Notably, these changes to the MREL requirements allow banks to comply with MREL on a consolidated basis under certain condi - tions. DGS If a bank is unable to meet its obligations towards eligible deposit holders, such deposit holders are protected under the Dutch implementation of the DGS. Please see 6.1 Deposit Guarantee Scheme (DGS) .
9. ESG 9.1 ESG Requirements
ESG requirements for Dutch-licensed banks primarily consist of (i) climate risk management requirements; and (ii) ESG disclosure require - ments.
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