Today’s report that the Dutch Government plans to institute a so-called Deposit Guarantee System in the Caribbean Netherlands is good news for Bonaire, St. Eustatius and Saba. If commercial banks there go broke for whatever reasons, clients with positive balances on their accounts will receive a maximum US $6,000.
That may not seem like a lot depending on how much money they have at the bank, but it’s certainly better than nothing. For now The Hague will even cover the 1-million-euros-per-year premium to create the necessary reserve, due to the limited carrying capacity of banks on the three islands.
One of the reasons mentioned for such a measure is the Central Bank of the Netherlands DNB having little control over the solvency of the local branches of parent banks in Curaçao. This is because these fall under the Central Bank of Curaçao and St. Maarten (CBCS).
At the same time it is stated that a similar arrangement of Curaçao and St. Maarten proved unfeasible due to its complexity. The Dutch Finance Ministry held consultations with the relevant bankers’ associations and two central banks on a Joint Deposit Guarantee System, but to no avail.
The latter is regrettable, because also customers in the two autonomous countries within the kingdom could probably use a bit more protection. While the fairly conservative local banking sector is much more stable and safe than in many other places, problems have occasionally occurred, like most recently with Giro Bank.
Perhaps it was not highly necessary, but without further explanation the public is left wondering whether this wasn’t another missed opportunity.
