Preparing for ECB supervision at NatWest Markets: Behind the scenes
NatWest Markets (NWM) has completed the transition of its supervision from De Nederlandsche Bank (DNB) to the European Central Bank (ECB). Varrlyn, a consultancy firm specialising in the financial services sector, together with Sander van Tongeren, played an important role in delivering the programme.
Whereas supervision was previously organised at a national level, ECB supervision introduces a much broader, deeper and more standardised approach. At its core, the transition requires banks to demonstrate – clearly and consistently – that they operate as fully fledged, independent EU banks.
For NatWest Markets (NWM), this shift represented a fundamental repositioning within the European supervisory framework. To prepare for this transition, an ECB Readiness Programme was launched from its headquarters in London.
An important objective of this programme was to demonstrate that NWM is not a “shell entity”, but a robust organisation with a sound business and operating model, strong governance, and mature risk and control frameworks.
The Desk Mapping Review
The Desk Mapping Review was a crucial part of the programme and was based on the EBA Guidelines issued in 2018 and updated in 2022. The review consisted of two complementary components.
The qualitative component focused on areas such as the business operating model, booking model, risk management and governance structure. The quantitative component centred on the trading desks within Capital Markets and Trading & Sales. At desk level, the review covered metrics including P&L, Risk-Weighted Assets (RWAs), staffing levels and booking models.
The role of Sander van Tongeren and Varrlyn
Sander van Tongeren and Varrlyn represented NWM Capital Markets throughout the Desk Mapping Review. Together, they brought a combination of deep financial markets expertise, a thorough understanding of investment banking operating models, and strong project and programme management capabilities.
“This combination allowed us not only to deliver the required data, but also to structure and clearly articulate the underlying narrative to the ECB,” said Van Tongeren.
Completion of the programme
Despite the complexity of the exercise, the project team successfully delivered all data and information requested by the ECB well ahead of the deadline set by the European Central Bank. In addition, a future-proof framework was established, enabling data to be identified and delivered more efficiently going forward, in the required formats and with the appropriate level of detail.
According to Van Tongeren, the most critical success factor of the transition was the capability, flexibility and expertise of the people working at NatWest Markets. He also highlighted the expertise of Varrlyn and the smooth collaboration: “It was reassuring to know that you could always spar with Varrlyn colleagues who are equally hands-on and deeply involved in the work. That made the collaboration both effective and genuinely enjoyable.”
