MISREADING the public mood can be costly when the government owns your bank, as the directors of ABN AMRO found out last week. The bank has been in the hands of the Dutch state since it was bailed out in 2009 as part of the global financial crisis that also dumped Royal Bank of Scotland in the laps of British taxpayers. The Dutch government had hoped to begin privatising ABN AMRO this autumn—until the news broke that the bank’s directors had awarded themselves a salary bump of €100,000 ($ 107,000) a year. An outcry in parliament led the directors to forgo their raises and Jeroen Dijsselbloem, the Netherlands’ finance minister, to postpone indefinitely the bank’s return to the markets.
The directors’ error of judgment is perhaps understandable. As in Britain, public sentiment in the wake of the collapse was furious with fat-cat bankers. But the Dutch board had been correspondingly cautious. The directors receive no bonuses, and their raise had been approved by parliament in 2011 but renounced each year until now.
Moreover, the Dutch economy is recovering after years of recession. The national forecasting body predicts 1.7% growth this…
