Dutch lenders hit as DSB Bank goes bankrupt

A Dutch court last night declared aggressive mortgage lender DSB Bank bankrupt, leaving other Dutch lenders liable for up to &euro;3.25bn (&pound;2.96bn) in deposit guarantees.<br /><br />The finance ministry rejected a last-minute rescue proposal that included a &euro;100m injection of government cash because of the risk it would disappear &ldquo;into a black hole&rdquo;.<br /><br />The bank&rsquo;s founder Dirk Scheringa &ndash; who had tried to find a buyer &ndash; condemned the outcome, saying &ldquo;we did not go bankrupt, we were simply ruined&rdquo;.<br /><br />Negotiations to find a buyer for privately-held DSB had been going on since the central bank asked the court last week to appoint administrators following a run which drained &euro;600m from the bank&rsquo;s deposits in just 12 days.<br /><br />Moody&rsquo;s Investors Service said the failure of DSB was, in its own way, a sign of the government&rsquo;s confidence in the banking sector. <br /><br />&ldquo;The collapse of DSB Bank may also indicate an expectation by the central bank that financial markets have become sufficiently stable again to be able to absorb such liquidation without endangering the confidence underpinning the remaining banking system,&rdquo; it said.