International Law

EMERGENCY MEASURES FOR CREDIT INSTITUTIONS IN THE DUTCH CARIBBEAN

By Karel.Frielink

The Central Bank has certain regulatory powers

Not all banks perform well. Sometimes things go wrong. In the Netherlands Antilles the Central Bank has certain powers to take over control, if necessary. The Central Bank may request the Court of First Instance to subject a bank (credit institution) to the emergency measure pursuant to Article 28 of the National Ordinance on the Supervision of Banking and Credit Institutions 1994.

The court may authorize the Central Bank to transfer all or part of the obligations of the credit institution and to partially or entirely liquidate the credit institution. The authorization shall include the liquidation of the assets until the Central Bank is of the opinion that the credit institution no longer has a negative equity. During the performance of these duties the Central Bank shall take into account the interest of the combined creditors.

During the emergency measure the Central Bank exclusively holds all the powers of the managing directors and supervisory directors of the credit institution. The Central Bank may, however, grant power of attorney to individual(s), granting them all or part of its powers. Furthermore, the Central Bank is entitled to authorize the managing directors of the credit institution to perform certain tasks. Throughout the emergency measures the managing directors and the supervisory directors of the credit institution are obliged to provide the Central Bank with any assistance it should request. The Central Bank is moreover entitled to dismiss the managing directors and the supervisory directors.

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on June 24, 2008 (boomark / email).