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continue. Management expects that the recession will impact Rabobank Group’s growth in lending and willresult in loan losses that are expected to be above Rabobank Group’s long-term average.In 2008, approximately three-quarters of Rabobank Group’s total income was derived from its Dutchoperations. Accordingly, changes in the Dutch economy, the levels of Dutch consumer spending and changesin the Dutch real estate, securities and other markets may have a material effect on Rabobank Group’soperations. However, because of Rabobank Group’s high level of product diversification, it has notexperienced major fluctuations in its levels of profitability in the past. Outside of the Netherlands, the marketsRabobank Group focuses on, i.e. principally food & agri, are impacted by business cycles only in a limitedway.Although Rabobank Group expects that the foregoing factors will continue to affect its consolidated results ofoperations, it believes that the impact of any one of these factors is mitigated by its high level of productdiversification. However, a protracted economic downturn in the Netherlands or Rabobank Group’s othermajor markets could have a material negative impact on its results of operations. See “Risk Factors – Factorsthat may affect the Issuer’s ability to fulfil its obligations under Notes issued pursuant to the Programme –Business and general economic conditions”.Impact of the financial crisisDue to the impact of the financial crisis on the market value of various financial assets and the need torecognise financial assets at fair value, the carrying amounts of these assets have been affected. At31 December 2008, the total negative revaluation of the portfolio of available-for-sale debt instrumentsamounted to € 407 million after tax and was recognised directly in equity.In the first quarter of 2008, two Asset Backed Commercial Paper (“ABCP”) structures were phased out, inpart following the introduction of the new Basel II regulation that became applicable to Rabobank Group as of1 January 2008. As a consequence, the ABCP outstanding at 31 December 2008 decreased to € 17.5 billion(2007: € 23.0 billion), mainly for funding own originated loans and customer loans and receivables. In thefourth quarter of 2008, limited use was made of the Commercial Paper Funding Facility launched by the U.S.Federal Reserve to support the commercial paper market. As at 30 June 2009 ABCP outstanding fell to€ 16.0 billion, chiefly as a result of the termination of the Neptune programme.In the first quarter of 2008, due to the scarcity of funding opportunities for Structured Investment Vehicles(“SIVs”), the remaining SIV Tango assets managed by Rabobank were taken onto the balance sheet ofRabobank Group. As a result of currency exchange rate fluctuations and sales, the valuation of the portfolio offormer SIV Tango assets on Rabobank Group’s balance sheet was reduced to € 3.8 billion as at 31 December2008. Rabobank has no other investments in SIVs.An important element of the bank’s liquidity risk management is to maintain a large portfolio of liquid and/orcentral bank eligible assets that can be used, if necessary, to generate liquidity quickly. Rabobank Group’strade and investment portfolios have a limited direct exposure to more structured investments, which amountsto € 9 billion on 31 December 2008 and € 8.7 billion on 30 June 2009, by far the largest part of which is TripleA rated. Due to the further deterioration of the U.S. housing market, related investments such as ResidentialMortgage Backed Securities and Collateralised Debt Obligations, have been impaired and the resulting losscharged to profit. For the year ended 31 December 2008, this amounted to a post-tax loss of € 418 million. Anadditional provision of € 152 million after tax was made for a liquidity facility granted by Rabobank whichwas partly secured on subprime-related assets. Owing to the further deterioration of the US housing market aswell as the corporate market in that country in 2009, a number of related exposures, such as residentialmortgage backed securities and collateralised debt obligations, have been impaired and the resulting loss ischarged to profit. In the first half of 2009, the amount involved was € 74 million after taxation.253