Financial sector watchdog AFM said on Tuesday an independent check is to be carried out on the thousands of interest-based derivatives sold to small Dutch firms by the banks.
Between 2005 and 2009 banks sold some 17,000 derivatives to 14,000 small and medium sized companies when they took out loans, to cover them against rising interest rates. But what most were never told is that if interest rates fell, they would have to cover the shortfall.
Several cases have already come to court and judges have ruled the banks failed in their duty of care towards their customers. The AFM then ordered the banks to review all cases. In December, however, the watchdog said the banks were still making errors and that clients were not receiving sufficient compensation.
Tuesday’s announcement sidelines the banks completely. ‘It is necessary to minimalise the banks’ room to interpret in the follow up phase,’ the AFM states. The banks – ABN Amro, ING, Rabobank, Van Lanschot and SNS Bank – have agreed to the plan.
Thank you for donating to DutchNews.nl
The DutchNews.nl team would like to thank all the generous readers who have made a donation in recent weeks. Your financial support has helped us to expand our coverage of the coronavirus crisis into the evenings and weekends and make sure you are kept up to date with the latest developments.
DutchNews.nl has been free for 14 years, but without the financial backing of our readers, we would not be able to provide you with fair and accurate news and features about all things Dutch. Your contributions make this possible.