Article by Bart Hinke
Economy (NRC Handelsblad, Netherlands)
Dutch banks have to comply with more stringent requirements than banks in the rest of the world. Banks that are crucial to the functioning of the Dutch financial system, probably before the end of this year must hold extra capital.
This has Lex Hoogduin, director at De Nederlandsche Bank (DNB) and possible successor to outgoing president Wellink, said today at a press conference. DNB wishes with these larger capital buffers to ensure that Dutch financial institutions withstand a new crisis.
Hoogduin said to be insensitive to the complaint by Dutch banks that they are internationally less competitive if they must comply with stricter rules: “So what? We must have a robust financial system. “Hoogduin could not tell which Dutch banks have to meet the stricter rules.
Measures in addition to Basel III
Netherlands anticipates on the rules this year are drawn up by the G20. The measures are in addition to capital requirements of Basel III. The new rules require banks worldwide in the coming years, to hold larger buffers against financial setbacks and economic shocks.
If a banking system still will fall, then the bankruptcy has to be completed without other banks sucked into it. Banks have therefore to draw a kind of testament (living will). With this measure, a shock like that caused by the bankruptcy of Lehman Brothers in the autumn of 2008 should be avoided.
Stress test for public finances
The government should better defend themselves against economic shocks, finds Hoogduin. Netherlands is therefore the first country in the world where public finances undergo a stress test. This test should determine what are the risks for the Netherlands in a possible new crisis.
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