Second capital injection round expected
The Dutch financial world expects a second round of capital injections, the Financieele Dagblad reports on Wednesday.
The paper says a number of banks which have received financial aid from the government do not have enough capital to absorb new write-downs and one-off losses.
Investors are already incorporating a further round of government help in their share price calculations, one source told the paper. ‘Investors are seriously expecting a recession, which will boost losses on credit and erode assets.’
Dutch banks have so far written off almost €22bn and been extended €32bn in new capital, the paper says. But half of the new money has gone on nationalising Fortis Nederland and ABN Amro, the paper points out.
The Dutch government has set up a €20bn bail-out fund for financial institutions and a €200bn loan guarantee scheme which it hopes will stimulate inter-bank loans.
Meanwhile, the finance ministry is to look into whether Dutch banks which have been given state aid are lending enough money to corporate clients.
‘The economy cannot turn if banks do not do what they are supposed to do – which is lend money to healthy firms,’ finance minister Wouter Bos said in his weekly interview with RTL-Z.
His comments follow strong criticism of the banks’ lending policy by economic affairs minister Maria van der Hoeven at a meeting in Brussels on Monday.
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