Central bank hammered in report into DSB bank's bankruptcy

Tuesday 29 June 2010

The Dutch central bank should never have given businessman Dirk Scheringa a licence to launch DSB bank, according to the official report into the independent bank's collapse in October 2009.

There were 'so many shortcomings in the leadership and organisation of DSB bank that giving the permit carried too many risks,' the report said.

The report said that Scheringa's leadership was one-sided and unprofessional and he was too much focused on earning money rather than the needs of his customers. Scheringa was not only CEO, but chairman of the supervisory board and, indirectly, the sole shareholder.

Lax

And once the banking licence had been given, the cental bank was too lax in its supervision of DSB and too reluctant to step in when problems emerged.

It was not until the summer of 2009 that bank officials were prepared to get involved, but by then the bank was already floundering amid a sea of reports about mis-selling and expensive life insurance policies.

Nevertheless, even if activist Pieter Lakeman had not called on customers to withdraw their money from the bank, bankruptcy may well have been unavoidable, the report says.

Reactions

MPs reacted with shock to the report, and called for a major overhaul of the way the central bank operates.

The Christian Democrats said central bank president Nout Wellink should explain in public how he plans to restore the bank's credibility. The bank has 'seriously fallen short' of the requirements of a regulator, the party said.

GroenLinks MP Jolande Sap said Wellink would be difficult to keep on in the job. 'We think it will be very difficult to let him stay on,' she said.

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© DutchNews.nl

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