Tuesday, August 17, 2010
Commando Team Will Replace Dutch Central Bank Governor Wellink
"No really, there are no problems at all, in fact: all banks are healthy. Green shoots everywhere. Trust us, we are your bankers ".
And in the 50 year old tradition of Dutch problem solving, unhealthy banks will be subsidised. Should there be unintended consequences of this subsidy these subsequent problems will also be subsidised. And these subsidies will go on and on until there are no trees left for the paper to write down the regulations of these subsidies.
No Reappointment Wellink
Google Translation: De Nederlandsche Bank (DNB) gets a commando team to quickly intervene when there is a bankruptcy risk with banks. Nout Wellink simultaneously may no longer apply for a new term as director of DNB.
This is an action plan caretaker Minister Jan Kees de Jager of Finance presented to the House on Monday.
The action plan is designed to become "intrusive, critical, and especially more effective". The amendment comes after a damning report over a month ago about the events surrounding the downfall of DSB Bank. An inquiry chaired by Michiel Scheltema then stated that DNB never should have granted a banking license to the bank of Dirk Scheringa.
To speed up action on problems, De Nederlandsche Bank (DNB), a new department on Interventions will be formed. This should be a command0 team which must actively intervene if things threaten to go wrong with banks and other regulated financial institutions.
The intervention team is separate from the regular monitoring and will have a separate mandate. This new department should "not shy away from confrontation and timely intervention as the evidence is not yet complete. More often than in the past, conflicts will be fought in court, says the action plan.
De Jager also wants the term of the DNB board maximized to fourteen years with a renewal term. Now its members are unlimited renewable for further periods of seven years.
This marks the end of the Wellink who has been criticized as bank president. July next year is his second time limit. Starting last year, Wellink yet that he was in third period, but de Jager cut that route now. Critics see the amendment as a way to save Wellink loss of face but to secure his departure.
Posted by Troy Ounce at 8:18:00 AM