The Netherlands has a scheme whereby the interests of account holders at banks are safeguarded, under the supervision of De Nederlansche Bank (the Dutch Central Bank). This scheme is known as the Deposit Guarantee Scheme (DGS) – the Deposit Guarantee System.
A bank is a business that operates with the money that account holders have entrusted to it. In part to protect the interests of account holders, banks established in the Netherlands are subject to the strict supervision of De Nederlandsche Bank (the Dutch Central Bank) Dutch banks are traditionally amongst the most stable in the world. The chances that a Dutch bank will be unable to honour its obligations are therefore very slim. Nevertheless, since 1978 a scheme has been in force in our country to guarantee the interests of account holders: De Collectieve Garantieregeling (the Collective Guarantee Scheme, known as the CGR). In 1994, a similar scheme was also introduced within the European Union. The ‘Directive on Deposit-Guarantee Schemes’ of 30 May 1994 obliges European Union member states to establish a guarantee scheme and lays down the minimum standards to which these schemes must comply. The Dutch CGR was aligned with this European directive with effect from 1 July 1995.
Investments are also covered
The scope of the Collective Guarantee Scheme was extended to include investments as a result of the ‘Directive on Investor Compensation Schemes’ of 3 March 1997. The scheme for investors at credit institutions and the deposit guarantee scheme were both incorporated into the ‘Collective Guarantee Scheme for Refundable Monies and Investments’ This scheme was declared generally binding on securities institutions by way of Royal Decree (RD of 21 September 1998) as well as banks (RD of 28 September 1998).