Friday, February 1, 2013

Europe's banks still in trouble, Dutch government nationalizes SNS REALL


Nationalization of a Dutch bank Friday provided a stark reminder that Europe is still struggling to shake off the legacy of the financial crisis and find a way to let banks fail without loading up governments with debt.

The Dutch government was forced to rescue SNS REALL to protect savers' deposits after the banking and insurance group racked up huge losses on real estate lending. Attempts to find a private buyer or investor failed.

Italy is grappling with a scandal at the world's oldest bank that could affect the outcome of elections next month and dent Mario Draghi's record as Europe's top central banker.

Monte dei Paschi di Siena, founded in 1427, last week revealed it faced losses of up to €720 million on three derivatives trades, carried out in 2006-2009, details of which were kept hidden from regulators.