Banks and coffeeshops: obligatory "joint ventures"
February 9, 2009
In The Netherlands more and more banks wanted to exit their relationships with coffeeshops. These are not so much known for their coffee, as for the distribution of soft drugs. A typical sector, since it is in the "grey zone" between being legal and illegal. Apparently several banks do not really want to be involved in it, if only for reputational reasons.
However, steps in that direction have resulted in questions of Members of Parliament to the Minister of Finance (responsible for the banking sector, even a major shareholder nowadays).
The conclusion is that banks can not follow their values and beliefs. Given their societal function it is considered to be important that they do not terminate these relationships, because otherwise coffeeshops might be pushed into "underground banking". Moreover the Members of Parliament asked whether the steps of the banks were an orchestrated effort which would be against competition law. The Minister promised to discuss the issue with the Dutch Banking Association.
Although contrary to their values, banks can not exit coffee shops because of societial demands. Of course society is in a strong position today. But this obligation to continue these "joint ventures" is yet another example of the complexity of the ethical decisions banks have to take.
(see appendix with QandA's in Dutch)
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