Not everyone happy with ING guarantee

The Dutch government has now put €94bn into shoring up the financial sector, taking yesterday’s €22bn risk guarantee for ING into account, the Volkskrant reports on Tuesday.

The paper says total exposure per citizen is now running at almost €6,000.
Unlike earlier bail-outs, yesterday’s decision to guarantee 80% of a high risk ING mortgage portfolio in the US has come in for criticism from a number of MPs, the paper points out.
The strongest attack came from the Socialists. ‘ING can keep the good risks and the government will take on the bad ones. So the taxpayer can pick up the financial mess,’ said SP MP Ewout Irrgang.
The guaranteeing of high risk loans is the first by a European government, the Volkskrant says. Nevertheless, Bos estimates there is a 70% chance the state will make money on the deal.
But Tilburg University professor Harald Benink tells the paper it is not an equitable arrangement. ‘The government is guarantor for losses on this loan portfolio but does not benefit from the profit ING makes on its other activities,’ he says. ‘It would appear the government has not got enough compensation.’

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