Wednesday, February 19, 2003

Ministry of Finance establishes working group for cost control and payment of supervision

The Ministry of Finance has released a letter in which it states that a separate working group will further investigate the options that are available to ensure a proper financing and cost control system for supervision of banks. The problem is that until now, banks did not have to pay for their supervision, but other financial institutions (insurance companies etc) did have to. Banks are rather unwilling to pay however, as they fear to finance an uncontrolled expansion of supervisors. Therefore the working group will also investigate how cost control of supervisors may be achieved.

Interestingly, the letter of the Ministry is published while this same morning a socialist MP (Norder) is quoted in the Financieele Dagblad:

.. undemocratic. ....In contradiction with a proper separation of duties the financial supervisors each establish their own wagon load of detailed regulations, meanwhile also operating as compliance officer and judge. The trias politica in the financial sector has been delegated all into a single hand.... The supervisors are monopolists that determine their own price....