Evilcoder.org

The last few days more and more reports came in that we have cities that invested money in Iceland, in the landbanksi bank for example. The money that was on the banks with high interest was money that the cities had as savings for projects, like improving schools, roads etc. Since they didn’t need it instantly they decided to put it on an high interest account, to gain some extra money out of it.

Stupid thing though: they invested more then 40.000euro (from which 38.000euro was initially covered, now increased to 100.000euro). A lot more. Some cities had a close to 30.000.000euro on those accounts. Eventhough the bank had a good credit rating at the time, I honestly do not understand those amounts of money. How stupid can you be when you know that you are only covered for a maximum of now 100.000euro. I also feel that these amounts of money should be invested within the country so that our taxmoney and city savings are locally kept and can be acted upon in case of need.

The problem is that you are handling with an foreign country now, which might not be obliged to return the funds, especially because the information clearly states what they cover and what they do not. One of the most stupid things that our cities did, this needs to be cleared up, and a few people should get kicked around a bit to learn that these things are just not possible. It keeps amazing me that these things happen.

Last night it became clear that the account holders for Icesave will see their funding back to up to 100.000Euro. This is great news for all account holders (including me) so that they do not see their savings burned up.

One question that still stands though: How could and do we foresee these things (as per Wouter Bos’ comment that we are responsible ourselves, which I share). It would be a good lesson for us (account holders) and the politics (Dnb/dutch gov.) that we need more insight in foreign banks that are banking within the country. It should be easy to see the liquidities (is that written like that?) of the bank or it’s status so that you know in what you are going to invest. A fair bit of responsibility also is in the pocket of the Dutch National Bank, they need to monitor these things better to avoid these kind of problems and have to oversee that banks can indeed payout their agreements one way or the other. Ofcourse that doesn’t stop banks from falling over, but still.

I can sleep well again