Financial Crisis Compels Dutch Authorities to Take Measures
At the end of September the financial crisis escalated in the
financial sector in the Netherlands. This escalation compelled the
Dutch authorities to take measures in order to guarantee the
stability and trust in the Dutch financial sector and to protect
the financial enterprises that are part of this sector. In this
article you will find a short overview of some measures that were
taken since the beginning of October.
AFM Takes Measures
Against Short Selling
As of 5 October 2008 the Netherlands Authority for the Financial
Markets (Autoriteit Financiële Markten ("AFM"))
took far-reaching measures against transactions that disrupted the
trade in shares of financial enterprises. On 21 September 2008 the
AFM had already imposed a prohibition on 'naked short
selling' (speculating on price losses on the stock exchange).
On 5 October 2008 this prohibition was replaced by the
further-reaching prohibition on the increase of a covered or
uncovered short position in financial enterprises. With this
measure the AFM followed the prohibition of the Financial Services
Authority issued in the United Kingdom. According to the AFM, this
new measure concerns the following Euronext-listed financial
enterprises: Aegon N.V., ING Groep N.V., Fortis N.V., BinckBank
N.V., Kas Bank N.V., SNS Reaal N.V., Van der Moolen Holding N.V.
and Van Lanschot N.V. (see also
www.afm.nl).
Liquidity
Provision and Capital Reinforcement Financial Enterprises
In a press release of 9 October 2008 the Ministry of Finance and
DNB (the Dutch National Bank) announced that they would take
measures to protect the Dutch financial sector, consisting of the
banks and insurers established in the Netherlands (and the groups
of which they are a part) against the extreme external shocks with
which they have to contend at the moment. These measures would
consist of liquidity provision and capital reinforcement. The
following measures were announced, amongst others:
- On 8 October 2008 Eurosysteem decided to fully grant the
liquidities that are requested by banks on a weekly basis in
any case until 20 January 2009 against fixed rates;
- As long as necessary DNB will provide credits to individual
financial enterprises on the basis of sufficient security. The
intention of these measures is to secure the short-term
financing of these enterprises against security.
- The Dutch government commits itself to provide capital to
every financial enterprise in the Netherlands that is
fundamentally healthy and viable. The background of this is
that the equity capital of these institutions will be
maintained at levels that the supervisory authority deems
necessary.
Banks Fall under the Dutch Guarantee Scheme
As of 7 October 2008 the cover of the Dutch guarantee scheme was
increased to
€100,000. Almost all banks in the Netherlands are covered by this
guarantee scheme. For a list of the most well-known banks please go
to www.dnb.nl. Foreign banks with a full Dutch banking license of
the DNB are also covered by the guarantee scheme. In addition,
there is a category of banks from the European Union with branch
offices in the Netherlands. All these banks are covered by the
guarantee scheme of the country of origin. Such a guarantee scheme
can have a higher or lower limit than the Dutch €100,000 per person
per bank. The minimum amount of €50,000, agreed upon in the
European Union, then applies in any case. On the other hand, branch
offices of Dutch banks in the United Kingdom fall under the Dutch
deposit guarantee scheme.
If you have any questions and/or remarks as a result of the
recent (legal) developments in the financial crisis, please contact
one of the following persons.
Bart-Adriaan de Ruijter
Tel: +31 20 5506 659
E-mail:
bart.de.ruijter@kvdl.nl
Bart de Man
Tel: +31 20 5506 841
E-mail:
bart.de.man@kvdl.nl
Marcel Willems
Tel: +31 20 5506 679
E-mail:
marcel.willems@kvdl.nl