Bank fail

The biggest news story in the Netherlands today is the collapse of the DSB bank, the government closing it down yesterday after a renewed bank run when rescue plans failed over the weekend. The bank had seemed to weather the economical crisis remarkably well, but had gotten into trouble for the way its supposedly cheap loans and mortgages turned out to be not so cheap after the fact, as well as how it sold all sorts of unnecessary policies on top of its mortgages. Thousands of customers were sold much too expensive mortgages and insurance and things came to a head when the self-proclaimed spokesperson for these people called for a bank run on DSB, supposedly because a bankruptcy would make it easier to renegotiate these loans. Absurd, but it worked.

Or at least, worked so far in that DSB is now almost bankrupt. Whether or not anybody will get their money back is doubtful and anybody with a dodgy, too expensive mortgage will still be stuck with it no matter what. Debts are assets after all, somebody will buy them up, whether or not DSB will sink.

At the joint press conference yesterday the finance minister Wouter Bos explained why DSB was allowed to fail where Fortis, ABN Amro or ING weren’t. Apparantly these were completely healty banks overcome by an unforeseen economic crisis, while DSB caused its own problems. A strange explanation, when Fortis had to be rescued from its own greed in attempting to takeover ABN and ING had been selling –and worse buying– dodgy mortgages in America which turned out to be not so valuable as they had thought. They had dug their own graves as much as DSB, but only the latter was allowed to lie down in it.

A classic case of the centre vs the provinces, I fear. Dirk Schieringa, the DSB’s owner/creator and sugardaddy to current Dutch football champions AZ, is an archetypical provincial selfmade man, who made his money in the provinces and also spends it there, without connections to the established money and power centres. Brass, somewhat dodgy, an upstart, so easy to throw to the sharks.