FINANCE Bloomberg Businessweek June 17, 201930
PHOTO: FOTOBUREAU DIJKSTRA BV/NEWSCOM. ILLUSTRATION BY 731THE BOTTOM LINE After state bailouts for three of the four
biggest Dutch lenders, the country’s finance industry faces
widespread mistrust and some of Europe’s strictest regulations.egalitarian country with relatively small income
inequalities,” says Jeroen Dijsselbloem, a former
finance minister. “The culture in the financial
sector, which overvalues its own achievements,
doesn’t really fit into that.”
As global financial institutions plot their escape
from post-Brexit London, few are shifting signif-
icant operations to the Netherlands. Japanese
bank Norinchukin will place its European office
in Amsterdam, and speed trader Jane Street Group
LLC will serve its EU clients from there, but most
top jobs that have moved have ended up in Dublin
or Frankfurt. The country could have been an
attractive destination for banks leaving London
if not for its tough rules on pay in the financial
sector, says Hans de Boer, chairman of the Dutch
employers’ federation VNO-NCW. “Brexit offered
an immense opportunity that the Netherlands
hasn’t seized,” De Boer says.
The animus is relatively recent, and with its his-
torical role in finance, the Netherlands was long a
comfortable place for bankers. In 2007, after aggres-
sive lending at home and abroad, banks’ assets
represented more than five times gross domestic
product, one of the highest ratios in Europe. But
the expansion backfired, and during the financial
crisis, three of the four biggest lenders, weighed
down by plump real estate portfolios and risky for-
eign adventures, had to be rescued by the state.
“Bankers’ prestige was higher in the Netherlands
before the crisis, but the fall was farther than any-
where else, too,” says Arnoud Boot, finance profes-
sor at the University of Amsterdam and chairman of
an advisory committee at the Dutch central bank.
Public rage boiled over as Dutch purchasing
power plummeted. From 2014 to 2018, a theater
group called The Seducers sold out venues with a
play drawn from “true stories of the banking sec-
tor” featuring megalomaniacal executives chortling
as they plot ways to pump up their loan books. ING
Chief Executive Officer Ralph Hamers is a frequenttarget of politicians, newspaper columnists, and
financial activists (one of whom is seeking to have
Hamers jailed for his alleged role in the bank’s
money laundering issues, an accusation ING
roundly rejects). Sjoerd van Keulen, once the coun-
try’s “CEO of the Year” as boss of SNS Reaal—a bank
that was bailed out—saw his contact details pub-
lished online in 2013. A talk show host urged peo-
ple to call or write demanding that Van Keulen give
back a €1 million ($1.1 million) bonus granted before
the crisis. No “scary threats,” the host added, but
to little avail. Van Keulen fled the country after the
Telegraaf newspaper published an aerial photo of
his sprawling mansion on its front page.
The crisis sparked a host of regulations such as
capital requirements 25% higher than the European
average. Dutch banks face a special tax to cover
the costs of their bailouts, whereas France and
Germany scrapped similar levies after Brussels set
up an EU-wide fund for the same purpose. They
can’t deduct the full amount of interest costs from
taxes, as banks in most other countries can. New
rules allow companies to claw back bonuses if per-
formance suffers. And bankers must sign an oath
that they’ll always put customers’ interests first,
won’t abuse confidential information, and will
acknowledge their “responsibility to society.”
The biggest battleground is pay. Bonuses in the
Netherlands can’t exceed 20% of fixed compensa-
tion, whereas elsewhere in the EU they can equal
a worker’s base salary. In the face of public pres-
sure, ING and ABN Amro Group NV have in recent
years withdrawn proposed pay increases for their
executives. After ING last year announced a pay
rise, Prime Minister Mark Rutte criticized the
move, calling banks “sort of semipublic institu-
tions” that must show greater accountability than
other companies. ING soon backed off the idea.
The banks have responded by dispatching top
managers to schools to explain the importance of
finance, and they’ve stopped hiring aggressive out-
siders to collect on bad loans. They’ve scaled back
investment banking units and limited their foreign
expansion. And their international loan portfolios
have tended to focus on less risky businesses such
as cargo trade and agriculture, sectors they’ve his-
torically specialized in. That’s as it should be, says
Joost Sneller, a member of parliament from D66, a
social-liberal party in the governing coalition. For
the Dutch, a good banker is “boring and decent,”
Sneller says, “not someone who’s adventurous and
pushing limits.” —Ruben Munsterman○ Van Keulen