Investigation criticises DNB in Icesave case

17th June 2009, Comments 0 comments

The Dutch Central Bank (DNB) should have been more careful with Icesave, say two economics professors.

Professors De Perron and De Moor-van Vugt investigated the role of DNB in the collapse of the Icelandic bank. They point out that little can be blamed on the Dutch bank for the Icesave case. The investigation was ordered by the Dutch Finance Ministry and says that DNB could not have done much because according to current regulations it is not allowed to warn clients; DNB President Nout Wellink “has little legal freedom to warn or make statements about the status quo of a bank.”

Meanwhile, the academics are questioning these rules, which are largely unknown to the public. The report says that Wellink failed to take decisive measures when Landsbanki (the mother company of Icesave) got into trouble at the end of last year. DNB should not have allowed the savings bank Icesave into the Dutch guarantee system that easily.

Landsbanki went bankrupt in October 2008, resulting in the possibility that more than 100,000 Dutch citizens and Dutch authorities would lose their savings. North Holland province and the municipalities of Amstelveen and The Hague lost millions.

Last week, the government of North Holland province stepped down because of its role in the banking debacle. The province stood to lose EUR 78 million over the bankruptcy.

Commissioner Borghouts, the government-appointed governor of the province, said "No acts have been committed which necessitated the resignation. All seven deputies are accepting their political responsibility and have tendered their resignations." Unlike the rest of his government, Borghouts did not resign, saying that the deputies were elected, whereas he was appointed by the national government.

He defended himself in a debate in the provincial parliament on Monday. A majority of its 55 members favoured Commissioner Borghouts’ stay. Borghouts will talk to the provincial leaders to decide from which additional functions he will resign.

Radio Netherlands / Expatica

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