Saving-account guarantees should be lowered

3rd November 2008, Comments 0 comments

Dutch banks are calling for guarantees of EUR 100,000 per savings account to be lowered.

3 November 2008

AMSTERDAM - Guarantees for Dutch savings accounts should be lowered, the Dutch banks said in a letter to Dutch Finance Minister Wouter Bos Monday.

Holders of savings accounts at Dutch banks are guaranteed for up to EUR 100,000 per person if a bank collapses.

In October, the sum guaranteed under Dutch law was increased for one year from EUR 38,000 per account holder.

The Dutch central bank increased the guarantee to boost consumer confidence in the banking system, which reached a low in early October, when the government nationalised the Dutch division of former Belgian-Dutch Fortis bank and the Dutch subsidiary of Iceland's Landsbanki, Icesave, collapsed.

Dutch nationals had a combined EUR 1.6 billion in Icesave savings accounts.

Quoted in Dutch daily Het Financieele Dagblad on Monday, Rabobank chairman Bert Heemskerk said: "We want this guarantee system to end immediately. If a large bank collapses, it will lead to a disaster."

Rabobank is one of the largest banks in the Netherlands. It has a so-called triple-A credit rating. It was the only large Dutch bank not to receive any assistance from the Dutch government following the credit crisis.

Under the Dutch guarantee system, if a bank collapses, the government pays back part of the sum to be repaid to the bank's customers, while the remainder is paid by contributions from all the Dutch banks depending on their size.

A spokesman for Bos said the letter from the Dutch banks was still "being studied".

[dpa / Expatica]

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