Running for president… of De Nederlandsche Bank (DNB): Nout Wellink failed, so politics will probably choose his successor themselves.

Nout Wellink, the president of Dutch national bank De Nederlandsche Bank (DNB) is in the last stint of his presidency. Although his personal preference was initially to do another stint, this plan was tackled by politics. After Nout’s financial adventures during the last five years of his presidency, this was a wise decision, although I don’t know the exact motives behind it. But this means, it is time to choose a successor for Nout Wellink.

One should think: let’s hope that Dutch politics will find a better man for the job than Nout Wellink. The new president should be a heavy-weight financial expert with good macroeconomical knowledge and experience in / with the (global) banking world and global financial organizations, like the IMF or the World Bank. Someone of unimpeachable integrity that is unstained by the credit crisis and has the standing and guts to stand up to the Dutch banking world and Dutch politics.

Well, they might have found one:

Dutch politics decided to push the DNB’s favorite successor Lex Hoogduin to the side and add two people with the right party badge on the shortlist:

• Kees van Dijkhuizen, VVD (conservative liberal party; party in government)
• Jeroen Kremers, CDA (Christ-Democratic Alliance; party in government)

My first thought was: oh my god, they found two political nitwits to do one of the most important financial jobs in The Netherlands. But maybe my first thought was mistaken after all.

Lex Hoogduin, the candidate of the DNB has ample experience in a financial environment:

• Senior executive at DNB
• Chief Economist of the Robeco Group (a very large Dutch investment group), which is a full subsidiary of Rabobank
• Personal advisor of Wim Duisenberg, the first chairman of the ECB

Lex Hoogduin during his time at Robeco / Rabobank was a strong proponent of heavily mortgage-financed homeownership in The Netherlands. He is seen in a video where he (poorly) defends the choices of banks to overload Dutch citizens with extremely high mortgage amounts. As this video is in Dutch, it is only advisable for Dutch-speaking, inquiring readers.

However, nowadays he sings a different tune, as he states that the Mortgage Interest Deduction in The Netherlands should be abolished, to unlock the Dutch housing market. I totally agree with him on this subject.

Kees van Dijkhuizen, the candidate of the VVD is the current Executive vice-president and CFO of the NIBC (Netherlands Investment Bank Capital). His resumee does offer some clues to why he has been picked as a candidate for following-up Nout Wellink at DNB:

      

• Treasurer-general at the Dutch Finance Ministry and Ministry of Economic Affairs
• Director-general of the Budget at the Dutch Finance Ministry and Ministry of Economic Affairs

I am not very enthousiastic on this candidate: This man can rather be considered a political ‘tiger’ than a banker, although he has ample experience at the NIBC. But the NIBC is only a relatively small bank with a fuzzy trackrecord and this fact does not ‘overqualify’ him for the job at the DNB. This might be a big problem if he is confronted with some stubborn banking guys of the likes of ABN AMRO, ING and Rabobank. They eat ‘desk-jockeys’ like Van Dijkhuizen for lunch and could manipulate him into loosening the reigns on the banks, which could be another disaster for the Dutch taxpayer. Besides that, he does indeed seem to lack some monetary knowledge.

Jeroen Kremers is the current CRO (Chief Risk Officer) of Royal Bank of Scotland and one of the two Dutch high-rank officers in the company. He has a very interesting resumee for the job:

• Four years executive director at the International Monetary Fund (IMF)
• Deputy Chairman of the OECD committee for Financial Markets
• Corporate Executive Vice-President / Head of Public Affairs at ABN AMRO
• Treasurer-General and Director Financial Markets at the Dutch Finance Ministry where he was nicknamed “ The Professor”
• Visiting professor at the Erasmus University in Rotterdam
• Considered a networker with immense analytical skills and diplomatically gifted
• However, he is not considered a “people’s person” and tried in the past to outsmart his opponents in debates.

This morning the newspapers and business radio all stated that Jeroen Kremers (just as Kees van Dijkhuizen) lacks knowledge of monetary affairs (they share the same press agency), but I disagree: If you have worked for four years as executive director at the IMF, I guess you know a thing or two about monetary issues. To me he seems a very strong candidate.

Let me be clear: for me it is not a good idea to turn the election of a non-political job like President of DNB into a politicized process, where the members of the 2^nd Chamber of Parliament (in general (economical) nitwits that ask the wrong questions) could make a politically motivated choice. This could turn quickly into a choice like: the CDA delivered the last president of DNB and the PVDA delivered the last chairman of the IMF, so it is now the turn for the VVD to deliver this president.

Especially not if you look at the challenges the new president of DNB is facing currently:

• Necessary reforms on the Dutch housing market;
• Reenforcing the Dutch banking world without looting the Dutch taxpayer again for billions of Euro’s
• Getting rid of all kinds of international aid funds to save everybody and their sister from defaulting, only in order to save the globally operating banks.

But especially Jeroen Kremers seems like a very strong candidate to follow-up Nout Wellink. He has exactly the right background, brains and experience to do this job.

And DNB’s candidate Lex Hoogduin has been part of DNB for a number of years, which makes him part of the problem: the DNB has been underachieving for a number of years during the credit crisis. Besides that: if you have a bad doctor and want to get rid of him, it makes no sense to ask this doctor: do you know a good doctor to replace you?