Amsterdam - Only a comprehensive international solution can
save the global financial markets, Arnoud Boot, professor of
Corporate Finance and Financial Markets at the University of
Amsterdam said on Dutch television on Friday.
Boot was commenting on continued losses at the Dutch stock
exchange on Friday.
By 1:30 pm (1130 GMT) AEX, the main Dutch index, had lost more
than 6.56 per cent and stood at 263.64 points. Since last week, the
AEX has lost 80 points - representing some 80 billion euros (109.16
billion dollars).
Thursday night Dutch finance minister Wouter Bos (Labour)
announced the government would make 20 billion euros available to
shore up the liquidity of banks embattled by the global financial
crisis.
The funds would be made available for all financial firms that
need it, including insurance groups.
Dutch ING Bank on Friday said it was an 'important step', but
added its own financial situation was such that it did not need to
make use of the new funds.
The other big Dutch banks, Rabobank and SNS Bank, also praised the
plan while emphasizing their institutions were 'rock solid' and
therefore did not require extra liquidity.
'Banks apparently fear that using the fund would stigmatize them,'
Boot said.
'This is not good. All banks, including the ones that are
rock-solid, should in fact use this fund. The extra capital provided
by the government has a double positive impact, raising both
liquidity and credibility.'
Boot added the government's 20 billion fund is 'a step in the
right direction', but said more similar steps had to be taken in the
Netherlands 'and internationally, within the next 72 hours.'
Meanwhile analysts said the continued drops of the AEX index might
be explained from the lack of liquidity in the banking world.
The stock exchange remained the only place for individuals and
firms to increase liquidity, by selling more stock.
Insurer Aegon dropped most on Friday (down 12.54 per cent),
followed by steelmaker Arcelor Mittal (10.44 per cent) and employment
agency USG People (down 10.11 per cent).
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