Dit prospectus is gemaakt voor de uitgifte van dit product en ... - Iex

REGULATION OF RABOBANK GROUPRabobank Nederland is a bank organised under the laws of the Netherlands. The principal Dutch law onsupervision applicable to Rabobank Nederland is the Financial Supervision Act (Wet op het financieeltoezicht), which entered into force on 1 January 2007 and under which Rabobank Nederland is supervised bythe Dutch Central Bank (De Nederlandsche Bank N.V.), the Netherlands Authority for the Financial Markets(Autoriteit Financiële Markten) and the Dutch Ministry of Finance (Ministerie van Financiën). RabobankNederland and the various Rabobank Group entities are also subject to certain European Union (“EU”)directives which have a significant impact on the regulation of Rabobank Group’s banking, asset managementand broker-dealer businesses in the EU and the regulation and control of local supervisory authorities of thevarious countries in which Rabobank Group does business.Basel standardsThe Basel Committee on Banking Supervision of the Bank for International Settlements (the “BaselCommittee”) develops international capital adequacy guidelines based on the relationship between a bank’scapital and its credit risks. In this context, on 15 July 1988, the Basel Committee adopted risk-based capitalguidelines (the “Basel guidelines”), which were implemented by banking regulators in the countries that haveendorsed them. The Basel guidelines are intended to strengthen the soundness and stability of the internationalbanking system. The Basel guidelines are also intended to reduce an existing source of competitive inequalityamong international banks by harmonising the definition of capital and the rules for the evaluation of assetrisks and by establishing a uniform target capital base ratio (capital to risk-weighted assets). Supervisoryauthorities in each jurisdiction have, however, some discretion in determining whether to include particularinstruments as capital under the Basel guidelines and to assign different weights, within a prescribed range, tovarious categories of assets. The Basel guidelines were adopted by the European Community and applied toall banks and financial institutions in the EU, and on 1 January 1991 the Dutch Central Bank implementedthem and they were made part of Dutch regulations.In June 1999, the Basel Committee proposed a review of the Basel guidelines of 1988. A new accord (“BaselII” - the previous Basel guidelines being referred to as “Basel I”) was published in June 2004. Basel II is aflexible framework that is more closely in line with internal risk control and that results in a moresophisticated credit risk weighting. The Basel II framework, consisting of three “pillars”, reinforces these risksensitiverequirements by laying out principles for banks to assess the adequacy of their capital (“Pillar 1”)and for supervisors to review such assessments to ensure banks have adequate capital to support their risks(“Pillar 2”). It also seeks to strengthen market discipline by enhancing transparency in banks’ financialreporting (“Pillar 3”).Basel II provides a range of options for determining the capital requirements for credit risk and alsooperational risk. In comparison to Basel I, Pillar 1 of the new capital framework aligns the minimum capitalrequirements more closely to each bank’s actual risk of economic loss. Pursuant to Pillar 2, effectivesupervisory review of banks’ internal assessments of their overall risks is exercised to ensure that bankmanagement is exercising sound judgement and has reserved adequate capital for these risks. Pillar 3 usesmarket discipline to motivate prudent management by increasing transparency in banks’ public reporting.Instead of the previous “one size fits all” approach, under Basel II banks have the option to choose betweenvarious approaches, each with a different level of sophistication in risk management, ranging from simple, viaintermediate, to advanced, giving banks the possibility of selecting approaches that are most appropriate fortheir operations and their financial market infrastructure.For credit risk, banks can choose between the “Standardised Approach”, the “Foundation Internal RatingsBased Approach” and the “Advanced Internal Ratings Based Approach”. The Standardised Approach is basedon external credit ratings and is the least complex. The two Internal Ratings Based Approaches allow banks to307