WILLEMSTAD - The Central Bank of Curaçao and Sint Maarten intervened at the Girobank yesterday. Doors were closed, payment cards were blocked, and the internet banking system was stopped.

Every customer can have his credit up to a maximum amount of 10,000 guilders (5500 U.S. dollars) but it is still unknown at what pace that is possible. According to the Central Bank, the measure would allow more than 90 percent of account holders to have their full credit.

The intervention came after account holders had massively demanded their credit. That happened after rumors that the tax authorities wanted to transfer 4.5 million euros via their Giro account to the Social Insurance Bank (SVB). The transaction failed because the bank did not have enough money. Not much later, oil distributor Curoil announced that it would no longer accept checks from the Giro bank and asked the distributor to pay its customers through other banks.

EMERGENCY REGULATION

Remarkably, since 2013 the Girobank has been subject to an emergency regulation from the Central Bank. The bank was in the hands of the Curaçao government until 2002 and since 2010 has been largely owned by IIG Capital, the International Investment Group in New York. Pension fund APC and the government retained a minority interest.

According to sources in the financial sector, the Giro Bank almost collapsing is the result of bad policies at the Central Bank itself. The Central Bank recently gave an advance of more than 270 million guilders because the Girobank ran into liquidity problems, but it is unclear whether there is cover for this.

DISMISSAL BANK PRESIDENT

The Central Bank recently came in the news negatively when the new president, former IMF CEO Bob Traa, already resigned after five months. Officially for personal reasons, but it is no secret in the financial sector that he was thwarted within the Central Bank because of his plans to clean up the financial institution after 35 years of leadership of his predecessor Emsley Tromp. Tromp had to leave after he was accused of tax evasion. Despite the promise, Traa did not get a permanent appointment at the bank.

The Central Bank is said to write off the bad loans and the other assets are being sold to other banks like the PSB Bank and the APC Bank.