Dutch Banks Oppose Stress-Test Disclosure, Confident Of Results

A group representing Dutch banks said Friday that it opposes a public disclosure of stress tests on banks, but added that major financial institutions in the Netherlands don't have much reason to worry about it due to their strong capital buffers.

"Publishing the stress tests results might lead to undesirable situations and can even result in a run on banks that are under-capitalized," a spokesman of the Dutch Banking Association told Dow Jones Newswires. "It is a political decision that won't contribute to a recovery of the sector."

However, major banks in the Netherlands shouldn't worry too much, the NVB spokesman said. "Their capital position is stronger than the European average and this gives reason for confidence," he added.

European governments agreed Thursday to submit their banks to public tests in an attempt to end worries that the Continent's financial system is hiding masses of risky loans that could put economies at risk. Next Month, European countries will publish the results of the EU's 25 most systemically important banks.

So far, it remains unclear which Dutch banks are on the list. The Dutch Central Bank, which will carry out the tests, wasn't immediately available for comment.

One analyst mentioned ING Groep NV (ING) and non-listed cooperative Rabobank as the most logical candidates, saying that both banks can take comfort in their solid capital buffers. "For ING, it shouldn't have happened a year ago, however. So the timing is favorable," the analyst said.

ING didn't reply to a request for comment.

Rabobank Chief Financial Officer Bert Bruggink said Thursday that he has serious doubts about the plan, and warned that it might force some European banks to raise tens of billions of euros extra capital.

-By Maarten van Tartwijk; Dow Jones Newswires; +31 20 571 5201; maarten.vantartwijk@dowjones.com

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