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The government has recently proposed changing how the Deposit
Guarantee System ("DGS") in the Netherlands is financed.
Under the proposed system, banks would contribute to the DGS each
quarter in advance. The contributions would be added to the deposit
guarantee fund from which compensation claims can be paid. If there
is insufficient money in the fund, the shortfall will be shared
between banks. Banks will no longer be able to take part in the
system for free - even a bankrupt bank will have contributed to the
system. By having a risk-differentiated contribution, banks bearing
the least risk will pay the lowest premiums. In addition, the costs
will be spread out over time so that banks will no longer be faced
with one high charge.
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