Politicians and regulators around the world continue to grapple with bank reform,
believed by many to be necessary following the implosion ofparts of the banking
sector during the credit crisis. However, how does Rabobank view its elf with in
this process? And where do the bank's main responsibilities lie? Piet Moerland,
Chairman of Rabobank Group, talks about his views on these issues.
Q What is your definition of sound and sustainable
banking?
A "Well, I think that responsible banking is not rocket
science. It has a lot to do with being discipiined, and
following simple principles - such as not overweighting
your risk profile - and being prudent in your activities."
Q How does Rabobank interpret these principles?
A "For more than a hundred years we have been a
cooperative, which means that we are part of society,
especially in the Netherlands. And in turn, we have a
responsibility to all stakeholders in that society. In order
to comply with that responsibility, we have to work in
a stable and sustainable manner, which means that we
need to operate closely with our clients. This is espe
cially important since our clients can become members,
our main stakeholders. In the Netherlands they have a
say in the direction in which we steer our bank, while
overseas our main clients are active on advisory boards,
working alongside us to determine our future direc
tion."
Q The sociai status of banks is currentiy at
the centre of a global and broad public debate.
What position should banks, and especially
Rabobank, take?
A "I think banks' primary focus should be on considering
the needs of their clients. At Rabobank, we make sure
we continually invest in earning and maintaining the
trust of our clients and our members. I am proud of
the fact that during the economie crisis we maintained
our responsibility to society by continuing to grant
loans to Dutch SMEs and agricultural clients. By doing
so, Rabobank continued to fulfil its social role, while
still pursuing a prudent risk policy and an appropriate
remuneration policy. Rabobank attachés great impor-
tance to its duty of care; clients can expect us to
provide them with high-quality, transparent products,
appropriate expert advice and handle their complaints
properly. Clients, however, also have a responsibility
to carefully consider their financial requirements and
the risks they accept."
Q According to different governments and inter
national media, banks have become too big to fail.
Ideas have been proposed to scale down banks and
even break down universal banks into separate
wholesale and retail banks. Do you think this is
a good idea?
A "I don't think these measures are necessary. You
can also raise control mechanisms by sharpening
capital requirements. I think that activities carried out
with funding related to retail deposits will be highly
restricted, more so than commercial activities on the
financial markets. But you need both when you want to
service larger, internationally operating clients. I expect
banks to act more carefully when using complex pro
ducts, making them more client-oriented. I also believe
that banks will reduce proprietary trading, and begin to
place clients more in the centre of the business model,
With regards to Rabobank, I think that we have always
applied a conservative policy to proprietary trading."
ISSUE 23 MAY 2010 RI WORLD 1 5
