DNB publishes Statistical Bulletin December 2009
Press release
| Date | 23 December 2009 |
Articles: An international look at pension provisions, Contraction in Dutch external claims and liabilities, Packaging of loans via securitisations at a standstill, covered bonds gain popularity, Over-the-counter (OTC) derivatives markets contracts sharply in short time.
An international look at pension provisions
The pension capital held by Dutch households amounted to EUR 740 billion at end-2008, making up more than half their financial assets.The proportion in other euro area countries is no more than one quarter, reflecting different arrangements for funding pensions in those countries. In many countries, pensions are mainly funded through a pay-as-you-go system, the state pension. In the Netherlands, the share of work-related collective pension benefits is at least as substantial as that of the state pensions. In all countries, the role of life insurers in pension provisions is expanding. The ratio of pension relative to final salary differs widely across countries but cannot be clearly attributed to the type of pension.
Contraction in Dutch external claims and liabilities
As a result of the financial crisis and economic slowdown, the Netherlands’ external claims and liabilities decreased in 2008. The difference between external claims and liabilities, or Dutch net external assets, widened to EUR 66 billion. The financial crisis and economic slowdown had a major impact on the Dutch balance of payments and Dutch net external assets. The current account surplus fell by EUR 20 billion to EUR 29 billion in 2008 and foreign investors bought up EUR 78 billion in debt paper issued by the Dutch state to finance, among other things, the rescue operations in the financial sector. Owing to the plunge in equity prices and capital withdrawals, the foreign direct investment positions in securities transactions and other investment declined.
Packaging of loans via securitisations at a standstill, covered bonds gain popularity
Following the outbreak of the credit crisis, the public market for bundling residential mortgages and other loans and selling them on in the form of entities specifically created to that end, i.e. special purpose vehicles or SPVs, ground to a halt. Investors lost confidence in these securitised loans and demanded high risk premiums for SPV issued bonds. Nonetheless, at EUR 195 billion, the amount securitised in the Netherlands over the past two years, from July 2007 to June 2009, was higher than ever (almost three-quarters of the issuing volume of all of the preceding years together). Banks largely bought the SPV issued debt instruments themselves to use as collateral against Eurosystem loans. With holdings equal to approximately EUR 250 billion, Dutch banks own an estimated 70% of the debt securities issued by Dutch SPVs. No securitisations took place in the third quarter of 2009. However, Dutch banks issued covered bonds to a total of EUR 4 billion, considerably more than in the past.
Over-the-counter (OTC) derivatives markets contracts sharply in short time
After several years of rapid growth, the global OTC derivatives market has contracted significantly since the second half of 2008. From mid-2008 to mid-2009, the total of outstanding positions held by Dutch banks, the main players in this market, fell by half to around USD 12,000 billion (2% of the global derivatives market). With a nominal value of USD 9,000 billion, interest rate derivatives accounted for the largest share of the OTC derivatives market, followed by currency derivatives and credit derivatives. The decline in credit derivatives was particularly marked (79%), owing partly to the evaporation of the securitisation market.
For more information, please contact Tobias Oudejans (tel. + 31 (0)20-5243100, + 31 (0)652496961) or Herman Lutke Schipholt (+ 31 (0)20-5242712, + 31 (0)652496900).
