Savings guarantee is being abused

Tuesday 28 October 2008

The cabinet is taking undue risks by guaranteeing savings at the foreign branches of Dutch banks for up to €100,000, according to MPs, reports Tuesday’s Trouw.

If a bank goes bankrupt, savers can claim up to €100,000 from the Dutch state. The limit was increased earlier this month from €38,000 and applies not only to ING and Rabobank, but to all banks based in the Netherlands.

‘There are a lot of Turkish banks which are active in other countries but have their headquarters here,’ MP Pieter Omtzigt, of the ruling Christian Democrats is quoted as saying by the Trouw.

‘And lots of Russian banks fall under the Dutch ruling as well. Are they well supervised by the central bank?’ he asks.

Advertising in Italy and France

On Monday, the Parool reported that ING is advertising in Italy and France offering an interest rate of 6% and drawing attention to the government’s guarantee.

‘We want to know how much foreign savings the Netherlands is guaranteeing,’ CDA MP Ellie Blanksma is quoted as saying in the Parool.

Last week Bos said banks are not supposed to draw attention to the guarantee in their advertising.

At the weekend, economist Willem Buiter of the London School of Economics warned that the guarantee is a danger to the Dutch economy and is being abused by banks to attract foreign savers.

© DutchNews.nl

Get the DutchNews.nl newsletter in your mailbox: Click here to subscribe

Print-version

Place your comments: