Saturday, May 12, 2007

DNB comforts Consumer Union with respect to ABN AMRO

A couple of days ago, the Consumer Union asked for clarification of the situation regarding ABN AMRO. Yesterday, the central bank provided a formal answer by means of an official letter of its president, Mr Wellink, to the director of the Consumer Union.

Essentially the answer is a reassurance that ABN AMRO is a very solid bank and that customers/consumers needn't be afraid that their funds will suddenly vanish. The central bank will carefully monitor the developments as a part of its supervision role and its role to advice the Ministry of Finance on the takeover.

Well, of course there is no real reason to worry. But the suggestion of Mr Wellink that customers can sleep quietly given that DNB watches over them is not one that is comforting. Last year, the central bank effectively failed to properly manage/supervise a smaller bank (van der Hoop), which lead to its downfall. And as of last week, some remaining creditors are now lining up to sue the central bank for neglect and not fullfilling its supervisory role properly.