Dutch bank bailout:THE DUTCH government yesterday renegotiated last weekend's bailout of Fortis in order to buy all of its Dutch operations for €16.8 billion, including Fortis's Dutch insurance operations and the Dutch operations of ABN Amro.

The surprise move represents a break-up of Fortis along national lines, and leaves the door open for ABN Amro, broken up last year in a €71 billion acquisition by an RBS-led consortium, to be revived as an independent bank.

Wouter Bos, Dutch finance minister, said the state took the decision after seeing how Fortis faced greater liquidity problems this week.

"Two weeks ago we saw how a healthy company lost the confidence of the stock market, and this week we saw how the same company was actually doing well on the stock market but in banking practice came up against ever greater liquidity problems."

Originally, the Dutch government had been due to take a 49 per cent stake in the Dutch banking arm of Fortis, leaving its insurance operations and the ABN Amro assets - that are held by an RBS-controlled vehicle - outside of its control.

"By taking the Dutch part out and paying a good price for it, we have achieved two things," Mr Bos said. "

We've protected healthy parts of the company from possible infection from parts that were less healthy, and it has delivered so much cash to the Belgian side of the company that the problems there should be able to be solved."

- (Financial Times service)