The position of the president of the Dutch central bank seemed unassailable, but Nout Wellink has come under fire following a critical report on the fall of the DSB bank.

The Scheltema Commission came down hard on the role of the Netherlands Central Bank (DNB) in the bankruptcy of DSB which was owned by self-made banker Dirk Scheringa. It concludes that DSB should never have been granted a licence and that the DNB should have done more to prevent the eventual failure of the bank.

Commission chairman Michiel Scheltema:
“DSB’s management structure was not suitable for a bank. This situation should have led the DNB to demand measures aimed at guaranteeing balanced management and avoiding conflict of interests when the bank was set up. The DNB […] should have insisted on fundamental improvements before a licence was granted.”

Licence
Caretaker Finance Minister Jan Kees de Jager endorses the Scheltema Commission’s conclusions, including those concerning the licence:
“The weakness of DSB’s structure was recognised by the DNB, but it failed to take the necessary steps or act in time. Looking back, the licence should never had been granted in 2005.”

Call to savers
Only halfway through 2009, did the DNB decide to act, but its plans were spoiled by a call by financial advisor Pieter Lakeman for savers to withdraw their money from DSB. This caused a run on the bank, which was precipitated towards bankruptcy. Dr Scheltema believes DSB's failure could have been avoided had it not been for Mr Lakeman’s call and suggests this sort of call for a run on a bank should be illegal. Minister De Jager agrees.

It is mostly MPs on the political left who are questioning whether Dr Wellink can remain at the helm of the DNB, although parliament officially has no power to dismiss him.

A parliamentary debate is being held on the Scheltema Commission report on Wednesday when Dr Wellink is due to answer questions in the Lower House.