Financial Crisis: interventions and follow-up; fourth quarter of 2009 and first quarter of 2010

In the third report, too, we looked at the following interventions and arrangements:

• state interest in Fortis/ABN AMRO;
• capital injection facility (ING, AEGON and SNS REAAL);
• guarantee facility for bank loans;
• extension of the bank deposit guarantee scheme;
• prefunding of the Icelandic bank deposit guarantee scheme;
• back-up facility for ING.
  

The report shows that at the end of 2009 the state was exposed to a financial risk of €43.8 billion in shares, loans and special securities. It was also exposed to a financial risk of €95.6 billion in respect of guarantees and potential losses on its interests in the portfolios of financial institutions.

Points for attention
In the report we point out several areas to which the Ministry of Finance and the House of Representatives should pay special attention. They relate to the management of state interests in the financial sector and preparations to wind up the interventions (exit strategy):

• the restructuring of financial institutions so that they can operate without state aid in the future, in particular the integration of Fortis Bank Nederland and ABN AMRO but also the restructuring of ING to meet the European Commission's state aid requirements;
• the settlement of disputes and/or objections to the interventions, especially with regard to Fortis/ABN AMRO and ING;
• compliance with the European Commission's requirements on the assessment of state aid. This point, too, relates chiefly to Fortis/ABN AMRO and ING;
• monitoring the development of each intervention, analysing risks and the control of financial flows arising from the interventions;
• the provision of information on the interventions, including information provided to the House of Representatives;
• formulating an exit strategy that strikes a balance between the wish to hold the interests in the financial sector for as short a time as possible and the need to wait for favourable market conditions in which to sell the state interests at a profit.
  

Sustainable remuneration policy
The report also looks at developments in remuneration policy in the financial sector. Some of the Ministry of Finance's interventions include conditions on sustainable remuneration policies at financial institutions that have benefited from the arrangements. In a number of interventions, for example, the state has set limits on the payment of bonuses and severance pay.