Over the past year, public trust in financial institutions has not weakened during the coronavirus (COVID-19) crisis. By contrast, trust in other key players in the Dutch economy and society has not emerged unscathed from the crisis.Read more
The global crisis caused by the COVID-19 pandemic has major consequences for the world of money, economics and finance. Together with financial authorities at home and abroad, De Nederlandsche Bank (DNB) closely monitors the situation, taking action where needed to minimise economic fallout.
How does the pandemic affect our economy?
In our latest intermediate projection, which we released in April, we wrote that we expect the second half of 2021 will stand in stark contrast to the beginning of the year. As a result of the COVID-19 containment measures, 2021 began with a small economic contraction. We expect the Dutch economy to show robust recovery from the summer onwards if the containment measures can be gradually lifted. Overall, the Dutch economy (GDP) is expected to grow 2.2% in 2021, followed by projected growth of 4.2% in 2022.
Coronavirus crisis puts Dutch financial sector to the test
So far, the financial sector has managed to absorb the shocks that resulted from the pandemic. Banking supervision and European collaboration in this areas have improved since the 2008 credit crisis. As a result, banks have sufficient cash, allowing them to continue lending to households and businesses. Even so, we must prevent the economic crisis from spilling over to the financial sector. Our most recent Financial Stability Report explains how we minimise economic fallout.
What we did to support households and businesses
We are pulling out all the stops to minimise the ramifications of the COVID-19 crisis, together with other financial authorities at home and abroad, such as the Dutch Authority for the Financial Markets (AFM) and the European Central Bank (ECB). In March, we gave banks additional leeway in order to maintain lending levels and absorb any losses. We lowered their buffer requirement to do so.
How the ECB supports households and businesses
The ECB has taken various measures to provide support in these uncertain times. For example, it announced the launch of its Pandemic Emergency Purchase Programme, as well as measures to support banks, allowing them to continue their lending operations.
The money in your payment and savings accounts is just as safe as before the COVID-19 crisis. Amounts held in bank accounts are guaranteed up to EUR 100,000 per person per bank. And all banks in the Netherlands are subject to supervision by DNB and the ECB. You can find more information on the page about the deposit quarantee.
The COVID-19 crisis has a deep impact across the globe. It also affects financial markets. As a result, the financial position of Dutch pension funds will also feel the impact. How things play out until the end of the year will determine whether pension benefits need to be cut. This is because pension funds decide on benefit curtailments based on their funding ratio as at year-end.