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Saturday, 9 November 2013

Dutch capital Amsterdam dismisses its contract with its house bank for ‘unfair banking’. Why this is a depression-like sign.

These times of crisis and economic hardship can sometimes be very resentful times. Times in which old bills are settled between people and between companies. Sometimes this even leads to the dismissal of people and companies for (small) things that they apparently do wrong now or did wrong in the past.

You put an awkward picture on Facebook?! You’re fired! You said something bad about your company or made a bad joke about your superior?! Pack your things in a box and act like a tree. Just leave!

In good and optimistic times, ‘clumsy’ people get often away with a fire-and-brimstone sermon and by making a promise to do such things never again. However, in these times?! You’re gone. For you there are ten others…

Some companies even lay off personnel that showed only a little less than outstanding performance in the recent past. Or people that simply don’t fit in the ambitions of their new boss. Because they can’t change very well or show too little flexibility in the execution of their job.

In my opinion, these are depression-like signs, as they can turn an economic recession in a long-lasting depression: as a consequence of such events, people (other workers) become scared and overly careful.

They stop taking any risks, as they have angst to do something wrong. They try to ‘blend in’ and survive in their jobs, without showing themselves in a negative or overly positive way. As a consequence, they might lose their self-esteem and ‘pizazz’.

This is bad news for themselves, but also for the companies where they work, as it puts a brake on innovation, entrepreneurship, good ideas and risky gambles that turn out fine eventually. Besides that, anxious people consume less for pleasure and make fewer large investments in durable goods for the future: they are busy with surviving, not flourishing. Survival comes first and consumption and luxury will come later.

However, it are not only people who are under the looking glass currently. Companies and government bodies also watch their suppliers Argus-eyed. Companies which deliver mediocre or poor quality will not get contract prolongations from their principals. And even companies that basically performed (very) well must deliver more service for less money… Or else…

Sometimes companies are even sent away for seemingly far-fetched reasons. A small article in today’s Telegraaf proved that such thing can happen to even the largest companies.

The city of Amsterdam wants to break up its ties with ING Bank, because the bank apparently does not do ‘fair banking’. The city is looking for a new house bank for its annual budget of €3 billion.

Yesterday, this was decided by the city council, where a majority endorsed an initiative by the Partij voor de Dieren (Party for Animals). According to council member Van Lammeren, “ING is not an honest bank as it invests in weapon systems and does do ‘other things wrong’”.

Amsterdam is now going to investigate whether their money can be stored at another bank, like Triodos Bank or ASN Bank [both are idealistic banks which endorse idealistic and green goals and reject ‘unethical’ investments – EL].

For various reasons, I cannot have an objective view in this matter. The only thing that I can do, is handing to you the information that the Amsterdam City Council used for making their decision. This is the Eerlijke Bank Wijzer (i.e. Honest Bank Guide).

Nevertheless, I think that the Amsterdam city council made a quite impulsive decision by wanting to abolish its contract with ING, seemingly based on a combination of rather soft facts and gutfeeling. To make things even worse, someone leaked this decision to the press, thus turning it in an almost irrevocable fact. Unfortunately, this event damaged both the city of Amsterdam and ING bank.

In my humble opinion, a far better strategy for Amsterdam would have been to start talks with ING and try to persuade them in changing the parts of their policy that are not well-received in the city council. By leaking this news to the press, the latter now seems virtually impossible.

This is the kind of decision that seemingly fits perfectly in these (sometimes) resentful, depression-like times, where people and companies punish each other, instead of trying to solve things together.


  1. They just want to control 3bln themselves IMHO. Moscow also has the Bank of Moscow to control its money.

  2. Privet Sergei,

    No, I don't think so, actually, as it is much too hard for a relatively small city with few civil servants to run a bank: the banking laws for prudential supervision have become quite strict in The Netherlands.

    I rather think that it was exaggerated idealism that spurred this development: a matter of acting without thinking first, without having an eye for the consequences.