The coming into force of the new 'Wet op de Ondernemingsraden'
(Staff Councils Act) on 1st September 1979 means a rather drastic
change in the pattern of consultations between this council and
corporate management. We are pleased to note that the greater
independence of the staff council that was the result of this amendment
of the law has not harmed the good and constructive atmosphere in
which consultations have always taken place. The amendment of the law
has rendered the task of the staff council considerably more arduous;
this will make high demands on the members for the future.
In consultation with the staff council we have decided to give the report
on social affairs a place in this annual report. We consider it a good thing
to publish one integrated report in which the different aspects of
corporate events are accorded an equal place.
In conclusion, a few remarks about the name under which our company
is known in our country. We have always been proud that our name
reflects our origin. Outside the Netherlands we are in our business
practice being referred to as'FGH hypotheekbank'. Many years ago the
Board already pointed out that with internationalisation continuing this
development cannot be prevented. Although for the time being it is not
intended to adapt our statutory name, we shall from now on use the
name 'FGH hypotheekbank' in the Netherlands as well.
Passive finance
During the year under review developments in interest rates were even
more strongly determined by external factors than in 1978. The gloomy
economic prospects, the stagnation in the growth of world trade, the
strong rise in oil prices, added to the increasing tensions in international
politics, constituted sufficient grounds for a renewed currency unrest.
In order to restrict the external influences on their unstable economies
the national governments have extensively used the discount weapon
which even resulted in increases in the bank rates of 2% and 3%.
With a conservative policy De Nederlandsche Bank has tried to maintain
the position of the guilder, but at the same time to avoid a monetary
stimulation of the rate of inflation. All this led to an increasing tightness
on the money market and more and more rising capital market interest
rates, an interest level of 10% being reached at the end of November
1979. There are no signs yet indicating such a slackening of tensions
in international currency relations that a lower level of capital interest
rates is to be expected in the Netherlands in a short term.
In 1979 the capital market was confronted with regular and large calls by
the government to cover the substantial financing deficits. The banks
and insurance companies, too, were not slow in following the
government on the issue front.
On the total of funds attracted of 1.108,2 million our company has
covered an amount of 653,2 million through the issue of mortgage
bonds on the open capital market.
If market conditions permit, we prefer to cover our needs of finance as
far as possible through the issue of mortgage bonds, with which the
small investor is also offered an attractive possibility of taking an interest
in our company in the fixed-interest-bearing sector. In addition, the
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