Published On: Sat, May 16th, 2020

Dutch national bank to become watchdog of CBCS

De Nederlandse Bank DNB

PHILIPSBURG – The government of Curacao and the Central Bank (CBCS) will have to provide the Dutch National Bank (DNB) with a broad insight into the situation in the financial sector and into potential losses, the Antilliaans Dagblad reports under the headline: DNB krijgt een dikke vinger in de pap – in other words, the DNB gets serious influence on financial matters in Curacao.

The increased role of the Dutch National Bank is a specific condition for the release of liquidity support to Curacao. This appears from a letter State Secretary Raymond Knops (Kingdom Relations) sent to the Kingdom Council of Ministers.

DNB will get information about the capital and liquidity position of the most important financial institutions in Curacao like banks, insurance companies and pension funds, as well as their projections for the next six months.

Curacao’s Prime Minister Eugene Rhuggenaath has labeled the conditions for liquidity support as unrealistic. The NOS quotes Rhuggenaath as saying that the Netherlands imposes “conditions that we cannot meet in spite of all of our efforts.” The PM said that he is not the messenger boy of the Netherlands.

The demand to provide information to the DNB has to do with the problematic situation at the Girobank, which could cost Curacao hundreds of millions of guilders. Several other financial institutions also fall under the emergency measure. Another condition is an analysis of the most important risks for these institutions for the short and medium term.

Curacao and the CBCS are furthermore expected to provide the DNB with detailed financial information about intended solutions, assuming that the costs related to handling these problems will be incorporated in the country’s multi-annual budget.

“This includes at least insight in plans for Girobank, PSB Bank, ENNIA and the consequences for the general pension fund Curacao (APC) and the government finances,” Knops writes in his letter. Financial supervisor Cft will be involved in this process because of the possible consequences for the government finances.

Another condition is that the board of the Central Bank must consist of at least three directors who meet the highest “fit and proper-standards” and standards of independence. Appointments will be done in consultation with DNB,” Knops writes.

One appointment is for a chairman “who meets requirements related to suitability and reliability.” At the orders of this chairman an assessment of suitability and reliability of the complete supervisory board – the individual members and the collective – will have to be done. “These conditions will have to be met before July 1, 2020,” the letter states. “DNB will inform the Kingdom Council of Ministers about the way Curacao and CBCS have subscribed to these conditions.”

The current management board consists of Leila Matroos-Lasten (secretary-director) and José Jardim (financial-economic director and interim president).

In March the supervisory board recommended Richard Doornbosch as president to the ministers of finance of Curacao and St. Maarten. The plan was to appoint Doornbosch in July, assuming a positive result of the screening by the security services of both countries.

Source: Antilliaans Dagblad


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