Irresponsible banks, lax supervision cited in Dutch crisis
"Gambling" banks, weak laws and lax supervision caused the global economic crisis to hit the Netherlands hard, a parliament-appointed commission said Monday, proposing stricter controls.
"The financial sector took unacceptably big risks, losing sight of the public interest," Jan de Wit, who chaired the commission into the causes of the crisis, told MPs as he presented the first half of its final report.
"It would be irresponsible to go back to 'business as usual'. Too much has gone wrong."
The report said banks allowed profits to weigh heavier than the associated risks.
Furthermore, legislation, regulation and supervisory structures fell short, causing the early warning signs to go unnoticed.
"Dutch society ultimately paid the price in the form of a crippled financial sector, a stagnated economy and an immense mortgage on the future in terms of a sharply increased government deficit," states the report.
It proposed limiting bank managers' bonuses beyond what has already been proposed and said such limits should apply to all company functionaries "particularly those who work in the dealing room."
The commission also suggested a European approach to financial sector regulation, saying the crisis had highlighted the shortcomings of national systems.
De Wit warned that many of the factors that caused the crisis remained present today and could cause another global economic collapse.
"We are proposing measures to try and prevent a situation in which we will again be confronted with banks gambling with the money of citizens," he told journalists in The Hague.
In the wake of the crisis, Dutch public finances switched sharply into a deficit of 5.3 percent of GDP last year from a surplus in 2008 -- partly as a result of government assistance of 37 billion euros (48 billion dollars) to the financial sector.
© 2010 AFP