Credit crisis and EU country crisis: Interventions and follow-up

As in our previous reports, we looked at the following interventions/arrangements:

• State investment in Fortis/ABN AMRO. 
• Capital injection facilities (ING, AEGON and SNS REAAL).
• Bank loan guarantee facility.
• Extension of bank deposit guarantee system.
• Prefunding of bank deposit guarantee payments in relation to Iceland.
• Back-up facility for ING.  

The fourth report reveals that at the end of 2010 the Dutch State will hold an estimated €40.9 billion in shares, loans and other securities issued by various financial institutions. At the end of 2009, its interests had been worth €43.8 billion. If guarantees and the share in losses on portfolios are taken into account, the State will be exposed to a total risk of €95.1 billion at the end of 2010. At the end of 2009, the exposure had been €139.3 billion.

For the first time, the report also includes a chapter on the financial risks the Dutch State is running owing to the measures the EU has taken to address the country crisis. They include the financial support provided to Greece of up to €110 billion in the period 2010-2014. The euro area countries will provide €80 billion of this support. The Netherlands will contribute a maximum of €4.7 billion. In addition, the European Financial Stability Mechanism (EFSM) and the European Financial Stability Facility (EFSF) were created in May 2010. The Netherlands' contribution to the two mechanisms will total €28.8 billion at most.

The minister wrote that he had read our fourth report on the credit crisis with interest. It gave him no further cause for comment although he did briefly consider Ireland's application for support from the European emergency mechanisms and the IMF on 21 November 2010. European support for Ireland and the Netherlands' contribution to it will be considered in our next report on the credit crisis. It will be published on Accountability Day, 18 May 2011. The minister's response gave us no cause for an afterword.

We consider our audit powers in an appendix to the report. We have only limited power to audit credit crisis measures taken by the Ministry of Finance at financial institutions. The De Wit inquiry committee on the financial system considered our audit powers in one of its recommendations. It concluded that the legislator should take action and remove obstacles if our audits were frustrated by the confidentiality provisions of the Financial Supervision Act. The House of Representatives debated the committee's first report and adopted its recommendations on 14 and 16 September 2010.