When the "bad state" is called again to save a bank – Netherlands nationalises SNS Reaal
On 1st February, the Minister of Finance of the Netrherlands, in close consultation with De Nederlandsche Bank (DNB), has decided to nationalise SNS Reaal. Savings deposits of clients are secure and the service provision of SNS REAAL has been safeguarded. The intervention has averted grave threats to financial stability and the economy.
Nationalisation under the Invervention Act (Interventiewet) has become necessary because SNS REAAL finds itself in acute distress on account of its real estate problems. DNB had asked the institution to produce a solution before the firm deadline of 31 January 2013, 18:00 hours. The absence of such a solution, would mean bankruptcy for SNS Bank and put the Dutch financial system in serious and immediate danger. After DNB concluded once the deadline had passed that no solution was found, nationalisation was the only remaining option to safeguard financial stability in the Netherlands. The entire operation will cost the State €3.7 billion. Furthermore, the State will extend €1.1 billion in loans plus guarantees worth €5 billion.