The Dutch cabinet is to tighten the rules for local government saving to prevent a repeat of the recent debacle in which many local governments may have lost huge sums of deposits with Icelandic banks.
From now on, the governments of Dutch provinces, cities and the district authorities in charge of water affairs may only save in banks within the European Union, Radio Netherlands reported Sunday.
The Dutch cabinet is also considering obliging local governments to save only with the Dutch Municipal Bank or with the Dutch state itself, the report said.
Dutch local governments may have lost 400 million euros (504 million U.S. dollars) they deposited with Icelandic bank Landsbanki, which ran into difficulty and was put under government control last month.
In addition, Dutch private citizens lost 1.6 billion euros (2 billion dollars) in deposits with the bank. The Dutch government has been trying to seek a promise from the Icelandic government to pay back Dutch savers, but so far without success.
Source:Xinhua
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