THE HAGUE – The Dutch government and the Dutch Central Bank (DNB) have little confidence in the functioning and integrity of the Central Bank of Curacao and Sint Maarten (CBCS). The Dutch Minister of Finance Wopke Hoekstra again demonstrates this in a letter he sent to the Second Chamber of the Dutch Parliament today.

DNB supervises the financial institutions in the Caribbean Netherlands (BES-Islands) but is dependent on information from the CBCS when it concerns branch offices which head office is on Curacao or Sint Maarten. Because of the doubts about the CBCS, the Dutch government has taken some additional measures in recent years. For example, it has been added to the BES Financial Markets Act that DNB is authorized to request information regarding head offices located outside the BES islands.

In order to protect residents of Bonaire, Sint Eustatius and Saba against the collapse of financial institutions with only branch offices, the deposit guarantee scheme was introduced in 2017. Customers who are duped by their bank’s bankruptcy can then receive compensation of 10,000 dollars.

To obtain even more certainty, the Dutch government has commissioned PwC to investigate the possibility of strengthening supervision by DNB. One of the options is to require providers of banking services in the Caribbean Netherlands to become more or less independent of their branches. Because this is likely to lead to the closure of the branches, this option has been rejected.

Minister Hoekstra, as is apparent from his letter to the House of Representatives, has now placed his hope in the appointment of a new president at the CBCS: expected to be appointed in the short term. This is, I expect, an important step in improving the functioning of the CBCS, which can ultimately influence the quality of prudential supervision of the BES islands.”