48 ❏ CAPITAL AND LIQUIDITY MANAGEMENT AEGON aims to secure stable and strong capital adequacy for its  businesses, strengthening its ability to withstand adverse market  conditions and ensuring the company is able to meet long-term  obligations toward its stakeholders. Guiding principles  AEGON has a number of guiding principles, which  determine its approach to capital and liquidity  management:  Taken together, AEGON believes these guiding principles  strengthen the company’s ability to withstand adverse  market conditions, enhance its financial flexibility and  serve the long-term interests of both the company and  its stakeholders.  Since October 2009, AEGON has been subject to group  supervision by the Dutch Central Bank in accordance  with the requirements of the European Union’s Financial  Conglomerate Directive. AEGON’s Corporate Treasury  manages and coordinates capital and liquidity  management strategies and processes. The department  acts under the authority of the Group Risk & Capital  Committee (for further details on this Committee, please  see pages 46 to 47). AEGON’s approach to capital management plays a vital  role in the company’s broader strategy, which is based in  part on ensuring more capital is directed toward those  markets that offer strong growth prospects and higher  returns. In recent years, AEGON has released a  In addition, AEGON has taken decisions in recent years  that have led to an improved risk-return profile, including  the sale of the company’s life insurance activities in  Taiwan and the run-off of AEGON’s spread-based  institutional business in the United States. Since mid- 2008, risk reduction measures have accounted for  approximately 40% of AEGON’s efforts at preserving  and releasing capital. AEGON has taken measures to improve its risk-return  profile and lessen its exposure to world financial  markets. These measures, in turn, have had the effect of  lowering the company’s overall capital requirements. In the thirty months from June 2008 to December 2010,  AEGON released a total of EUR 6.7 billion in capital from  its businesses, well above the company’s initial target of  EUR 4 to EUR 5 billion. In combination with other  measures (see the Strategy section of this report on  pages 9 to 15), this capital release program ensured  AEGON could withstand the sharp deterioration in  economic and market conditions during the global  financial crisis. In December 2008, AEGON secured EUR 3 billion in core  capital from the Dutch State through the issuance of  convertible core capital securities. The core capital was  part of a broader program of support for banks and  insurance companies in the Netherlands during the  recent financial crisis (see the Strategy section of this  report on pages 14 to 15 for more detail). significant amount of capital from its existing businesses  through a combination of risk reduction, greater capital  efficiency and a more active capital management strategy.  Given current uncertain economic and market conditions,  AEGON intends to retain an adequate capital buffer for  the foreseeable future. For an overview of AEGON’s  strategy, please see pages 9 to 15. ■ Ensure AEGON’s business and operating units have  strong capital adequacy.  ■ Manage and allocate capital as efficiently as possible,  maximizing returns and supporting the company’s  overall objective of sustainable, profi table growth.  ■ Maintain overall capital strength and an effi cient  capital structure through management of the  company’s capital base and leverage.  ■ Ensure sufficient liquidity to meet obligations at a  reasonable cost to the company.  ■ Ensure AEGON’s continued access to international  money and capital markets on competitive terms and  thereby reduce the company’s overall cost of capital. Governance Capital management Strategic importance Improving risk-return profi le Releasing capital Core capital from the Dutch State