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Balkenende and Bos on the financial crisis

News item | 30-09-2008

Prime Minister Balkenende and Minister of Finance Bos have spoken in parliament about the situation on the financial markets and the government's acquisition of shares in Fortis.

'The public must be able to count on a banking system that is solid and dependable,' said Minister of Finance Wouter Bos. 'If that should be called into question, the government is obliged to step in on behalf of its citizens. That's exactly what happened last weekend.'

On Sunday 28 September 2008 the Netherlands decided to acquire a 49% share in Fortis Bank Nederland with the control that such an interest entails. It was also agreed that Fortis would sell its shares in ABN AMRO.

Mr Bos said that, together with De Nederlandsche Bank, he would ensure that ABN AMRO 'can find a new home where it can conduct its banking activities in familiar and reliable surroundings, in keeping with its key function for the Dutch financial system'.

Confidence

Prime Minister Jan Peter Balkenende indicated that over the past year, and particularly in the last few weeks, Fortis had been under considerable pressure, due in part to broader problems in the financial sector. By that point, he said, government intervention was the only way to restore confidence.

'If Fortis had gone under, it would have inflicted disproportionate damage on the Dutch financial system and thus the Dutch economy as a whole,' said the prime minister.

The government does not have the power to control the markets. 'What we can do,' said Mr Balkenende, 'is contribute to solutions that boost confidence and safeguard the money of these banks' customers.'

International

The financial crisis is, in the prime minister's view, 'a quintessentially international issue, that will to some extent require international solutions'.

The government hopes that the US Congress will be able to reach agreement about a financial bail-out plan. The prime minister also stressed the urgent need for better cooperation at European level with regard to financial supervision and financial stability.

The government maintains close contact with the governments of other EU countries and with the various European institutions. Mr Balkenende will shortly be meeting with President Sarkozy of France, the current holder of the EU Presidency.

Strong foundation

The government realises that many people are concerned about what this financial crisis will mean for them. 'So are we. The Netherlands will not be immune to the effects of this crisis,' said Mr Bos.

According to the finance minister, 'amid all this upheaval' the foundations of the Dutch economy are strong.

'Our financial market is different from that of the US,' argued Mr Bos. 'The products that led to the crisis there are virtually unknown here; the banks that have gone out of business there do not have a presence in this country, and financial supervision, which has been fragmented and in some cases nonexistent in America, is first-rate in the Netherlands, serving as an example to the rest of the world.'