Battle of words over small savers heats up

Foreign banks have reacted with surprise to Rabobank CEO Bert Heemskerk’s interview in the Financieele Dagblad in which he says newcomers on the Dutch market are competing unfairly for small savers.

Heemskerk said foreign banks can offer higher interest rates because their investments are more risky. But when things go wrong, large banks like Rabobank have to pay up under the European bank guarantee scheme.
The scheme protects savers from bankruptcy and ensures they are refunded up to €38,000 if a bank gets into trouble. Banks pay into the fund in proportion to their market share. Rabobank has 40% of the Dutch savers market.
Peter Jernberg of Yapi Kredi Bank tells the FD his bank does take more risks. ‘Heemskerk’s problem is that his clients ask him why he is not paying them higher rates of interest, Jernberg is quoted as saying.
And Martijn Hohmann, director of the Dutch Icesave operation, tells the Volkskrant that Heemskerk’s statement is surprising. ‘The guarantee is there to allow banks to compete across borders,’ he says.

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