Treasury to pay out Icesave savings

The €62,000 increase in guaranteed savings for people who lost money in Icelandic internet bank Icesave will be funded by the treasury rather than the Dutch banks, finance minister Wouter Bos said on Tuesday.


At the end of last month, Icesave Nederland owed around €1.7bn to over 128,000 individual savers.
The Netherlands raised the official guarantee on bank savings from €38,000 to €100,000 in the wake of the collapse of Icesave in October. It was agreed that Icesave would pay the first €20,000 of the lost savings.
Under the guarantee system, Dutch banks, based on the size of their share in the market, would then have to pay the remainder.
But Rabobank, with 40% of the Dutch savings market, led a protest against this attempt by the government to get Dutch banks to pick up the bill for Icesave’s collapse.
Bos has now agreed that the banks will only have to fund the difference between the Icelandic guarantee (approx €20,000) and the original Dutch limit (€38,000). The remainder, some €62,000, will be paid by the treasury, he said.
At the beginning of November, the banks wrote to Bos urging him to scrap the deposit guarantee scheme altogether. ‘If a big bank collapses, it will cause a downright disaster,’ Rabobank chairman Bert Heemskerk said at the time.
He wants the guarantee system to be replaced by an insurance-based scheme, in which savers could insure their money for a fixed premium.
The Telegraaf reports on Wednesday that Bos is considering moving in that direction. ‘There should be a European fund which savers rather than governments contribute to,’ the paper reported Bos as saying.

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