Wednesday, September 28, 2005

Keep the bank branch open...?

The Dutch socialist party is republishing an initiative that dates from 4 years ago. The initiative aims at keeping bank branches open and obliging banks to do so. There's one minor detail missing however. And that's the original problem.

Originally in 2001, the problem was that elections were coming up and the socialist party sought an issue to become popular with the public. And bank bashing always works of course (it's also a popular strategy of the European Commission to increase its popularity), so the PvdA chose to do so as well. Quite some customers were confronted with banks that chose toclose down local branches in favor of more modern means of communication and service delivery (phone, Internet). And so the plan was born to oblige banks to offer services and ensure that a bank branch was close to every 10.000 inhabitants.

When, after some discussions with banks, it turned out that the banks already fulfilled this criterion, the idea was to change the proposal and require that for every 5000 inhabitants a branch should exist (in fact a branch that would be a white labeled office allowing all bank customers to do business there). And in order to sell the idea, the concept/ideology of universal services obligation was used.

Meanwhile the public adapted to technology, new distribution channels started to take over the role of branches. But PvdA member of parliament Ferd Crone kept on revising his proposal and started an legislative initiative.

Why he has now sent it to parliament is a complete mystery. In september 2004, the Council of State advised negative: it saw no reason for legislation. The Ministry of Finance stated at the end of 2004 it deemed the proposal to be disproportionate and unnessecary. The Dutch platform for payment systems found the problem to be limited to single areas only. Furthermore a renowned Dutch expert on Universal services (van Damme) analyzed the issue and did not find a need for the legislative proposal.

I'm curious to find out if there is more to this than is apparent to the eye; otherwise I would not understand why the socialists maintain this initiative. Unless of course if this is already their first step towards the new elections......?