Dutch to support U.S. bank plan, seek EU support

AMSTERDAM (BestGrowthStock) – Dutch Finance Minister Wouter Bos has backed the plan from President Barack Obama to limit the scope and size of banks and reduce their risk taking and will push to win support of the plan among EU leaders.

Obama last week threatened to fight Wall Street banks with new proposals that would be the most far-reaching overhaul of the U.S. banking industry (Read more about the banking industry recovery.) since the 1930s. The proposals still need congressional approval.

Bos said in a letter to Treasury Secretary Timothy Geithner he agrees further steps are necessary, stressing that some of the financial institutions that were on the brink of collapse 14 months ago are, worryingly, again growing in size.

“This jeopardizes the thin layer of regained trust of the general public in the financial sector, and as a result many of our combined efforts so far. This is unacceptable,” Bos wrote in the letter made public late on Monday.

He added the Netherlands was keen to discuss these issues with the United States and others in the G20 and will try and win support for Obama’s views in Europe in the coming months.

The Dutch financial sector was also hard hit by the credit crisis and the government nationalized the Dutch operations of Fortis and ABN AMRO for 16.8 billion euros, while also providing capital and guarantees to ING and insurer Aegon.

Obama’s shake-up proposals would prevent banks from investing in, owning or sponsoring a hedge fund or private equity fund and bar banks from proprietary trading. They also would set a new limit on banks’ size.

Major European economies had offered support last week to Obama’s plan, but indicated they had no plans to follow suit.

A European Union source had also told Reuters the EU would not imitate Obama’s plan, because it aimed to reduce risk in the sector through other means.

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(Reporting by Aaron Gray-Block: Editing by Neil Fullick)

Dutch to support U.S. bank plan, seek EU support