The Prey blind pride breaks ABN AMRO

The book of (now) professor of journalism at the University of Groningen, Jeroen Smit, about the demise of the ABN AMRO Netherlands not let go. A play based on the book premiered on March 10, 2012 and a three-part television series in preparation, in the course of this year will be broadcast.There have been numerous reviews and comments on the book appeared that anyone can google.The book is not easily accessible because a lot of financial jargon in state and the 133 interviews had to be made anonymously. But everyone qualifies the book as a "must-read."

Most of the comments on the book of wonder, not unjustly, the lack of management skills in the Board of Directors of the bank and especially to Mr Rijkman Groenink that from 2000 to 2007 was chairman of that Council. Driven by boundless ambition, he proved unable to put out a consistent strategy and the noses of the bankers in the same direction. There is enough in many reviews about it. Because the book revolves around the figure of Mr Rijkman Groenink threaten other aspects that have contributed to the demise of the bank in the background to hit.

The main reason to once again pay attention to the book is the fact that the House in March to begin deliberations on the restructuring of the banking system. At these consultations "roundtables" preceded by the Dutch bankers. The Guardian reported on 1 February on these interviews show that the attitude of the Dutch banks are not encouraging. It precludes a division of banks should avoid the major risks of banking on their own account (propriety trading) are shifted to the taxpayer. The argument, we do much to control the risks and gespliste no big bank can serve customers, which is harmful to the Dutch economy. In other words, we have the capital cushion of savers need to scale transactions for own account to run. That’s not exactly reassuring.

In "Prey" is the state of affairs described in the wholesale division of ABN AMRO. This division had its own "pool" for the payment of bonuses. A malicious would be "pool" translates as pool, but then begin to bankers very much like Scrooge McDuck to appear. The Chairman of the Board had no control over the distribution of bonuses and the contribution of the division at the bank was voornamellijk result in the raising of the cost. That caused a critical attitude among analysts and the discontent among shareholders about the stagnant stock price. In "Prey" is signaled that many expensive "investment bankers" were drawn based on predetermined bonus payment, regardless of the actual performance. That is a risky approach that a "utility banking" with all its social functions can not be exposed. Nevertheless, the Dutch Central Bank is already behind the position of the banks established. (Nu.nl, February 3) If it is not a mandatory junction will be at least a scheme should be that the "adverse incentives" from the system gets, and as with any scheme will again ask for supervision.

One may hope that the House will also consider the role of the Supervisory Board of such monitoring. The banks are entirely free to choose what happens at the board ABN AMRO has resulted in there at some point no commissioner from the banking world in the Council Sat How does one then good control and direction that can? It’s still a bit of a well-paid world of "knows us".The idea would be the supervisor (DNB) more closely in the course of events to involve an obligatory by Commissioner DNB needs.

"The Prey" is also somewhat ambivalent about the role of DNB in ​​the collapse of the ABN AMRO.The merger with ING, which has been long in the role but did not materialize, although DNB very much in favor of it. In retrospect, that failure is a godsend. The combination ING / ABN AMRO, one of the largest banks in the world today and how that DNB had wanted to save time once the banking crisis hit. Questions remain about the role of the regulator and its ability to manage the risks of new financial products to estimate. The economist Henk Gardens suggested to regulators to account in parliament. (Http://mejudice.nl)

All in all a nice job for the Chamber. Let’s not forget that a large bank has a big bonus "pool" and large bank is better for the ego of the CEO.

Mr. Rijkman Gronink, for it entailed decisions, applied this week in the TV program "College Tour" again to supervisory boards. He felt that the collection of his bonus shares in the collapse of the bank had nothing to do with grabbing. Other shareholders had also cashed yet? But other shareholders were not responsible for the bankruptcy and it had just paid for their shares?
Click HERE to read more from Wieck Wildeboer columns.

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