A bank, not in the PIIGSC (Portugal, Ireland, Italy, Greece, Spain, Cyrpus) is insolvent. It’s in Netherlands. So the government is taking it over.
– goal is to “shore up confidence”
– Netherlands’ deficit was already noncompliant, now even worse
– collapse would have been too big, and hurt financial stability
– SNS gets €2.2B “capital injection” (free money), €1.1B loan
– the gov’t will guarantee €5B of its debts
– people will be be mad at use of public money, so other banks forced to contribute €1B
– €2.3B out of €9.8B loans are nonperforming–23 percent!