Dutch Central Bank Seizes Dutch Bank After Bank Run, Sketchy Business Practices
The most curious part here, and one which should be of special importance to Americans who are still under the delusion that the FDIC protects any amount of their deposits, is that DSB customers can't get to their money. So if you hear whisperings of your bank in trouble, don't be the guy standing at the end of the line. That's all I'm saying.
The Dutch Central Bank, or DNB, said Monday it has taken control of struggling DSB Bank NV as talks with a consortium of Dutch banks failed to agree a support plan for it following recent heavy deposit withdrawals.
The DNB asked a Dutch court to be allowed to take control of DSB Bank after its solvency came "under great pressure" as account holders withdrew cash.
DSB Bank, a nonlisted business with a balance sheet worth about €8 billion, hit difficulties after the Dutch financial authority, AFM, put it under investigation several weeks ago for allegedly trying to sell mortgage customers additional expensive insurance policies. AFM had previously fined DSB Bank €120,000 in August for making it a condition of loans that borrowers took out insurance.
In the past week two Dutch customer associations urged DSB Bank clients to withdraw their savings and deposits.
Over the weekend the Dutch central bank, the finance ministry and a consortium of two listed Dutch banks, ING Groep NV and SNS Reaal NV, and three non-listed banks, Rabobank, ABN Amro and Fortis Bank Netherlands, attempted to find a solution to DSB Bank's problems. They finally decided that its financial situation was too risky, the Dutch finance ministry said Monday.
The Dutch finance ministry also said that DSB Bank's problems weren't caused by the credit crisis, but by the bank's own business practices and uncertainty among its customers.
DSB Bank account holders don't have immediate access to their money. However, the DNB said DSB Bank clients can open accounts with other banks without going through the usual application process which can usually takes several weeks.
Under the Dutch deposit guarantee scheme, accounts of up to €100,000 are guaranteed by DNB and the scheme is funded jointly by the Dutch banks.
Well I bet DSB depositors feel dumb, don't they?
Jr Deputy Accountant humbly suggests here that you subscribe to Federal Reserve email alerts to find out what sort of trouble your bank might be in. Sticking your head in the sand won't make any of the trouble go away, sadly, but it could mean your money tied up in bureaucratic bullshit.
To those of you who have asked how I live without a bank, I promise I'll get into this later just for your sake. Seriously, it's easy. I get dirty looks at Chase when I sneer back at tellers "Open an account with you? You must be trippin." but it sure makes for fun bank trips.