Banks in high level talks on state support

Friday 16 January 2009

Banks, pension funds, insurance companies and finance ministry officials are in high level talks on collective use of the government's €200bn loan guarantee fund, the Financieele Dagblad reports on Friday, quoting finance sector sources.

Until now banks have been reluctant to make use of the guarantee fund set up by the government last year because of fears it could damage their reputation, the paper says.

'In this market everyone is really nervous that using this fund will show people all is not well with a bank,' one source told the FD.

Up to now, only merchant bank NIBC and car lease company Leaseplan, which has a banking licence, have made use of the scheme.

Support

Economic affairs minister Maria van der Hoeven says in an interview with Friday's Trouw that finance minister Wouter Bos is drumming up support for the guarantee fund.

'This week he went to the banks to make it clear that they have to be serious about extending credit. It is right that we acknowledge that this is a real problem for companies. Saving banks is not enough, not even in the short term,' the minister said.

The government has nationalised Fortis and ABN Amro Nederland and given cash injections to ING, Aegon and SNS Reaal.

The cabinet is due to reveal a number of new measures to stimulate the economy later on Friday.

These will include a new guarantee scheme for large firms, extended export credit and more measures to prevent mass redundancies, the paper says.

© DutchNews.nl

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