Dutch financial sector’s foreign exposures increase

Statistical News Release
Date 27 December 2012

In the third quarter of 2012, the market value of the Dutch financial sector's exposures to the rest of the euro area grew by EUR 23 billion (3%). The increase was largely attributable to the recovery of equities and bond prices, while equity purchases also climbed and more loans were extended. Exposures to other countries also took a turn for the better, partly owing to improved stock market conditions.

The Dutch financial sector’s foreign exposures to the rest of the euro area also augmented in the third quarter of 2012, by EUR 23 billion to EUR 772 billion. Pension funds recorded the largest increases and saw their exposures rise by EUR 12 billion to EUR 232 billion. Insurers (EUR +3 billion) and banks (EUR +8 billion) also reported rises. The latter’s foreign exposures to the euro area were the largest at EUR 426 billion.
The increase in foreign exposures to the euro area was mainly attributable to France (EUR +13 billion) and Germany (EUR +7 billion). This picture is generally seen for both banks and pension funds and to a lesser extent for insurers. Dutch banks saw increases in interbank positions, including treasury activities such as securities lending to French and German banks in particular. Pension funds and insurers mainly expanded their bond portfolios. Paper was bought as well as sold. Investments in French bonds saw a significant increase owing to price rises (around 5%). Small purchases of French paper were made, but some market participants – including Dutch banks – cashed in and sold French government bonds. The volume of German paper held by pension funds remained broadly unchanged with price rises and some sales cancelling each other out. Insurers on the other hand bought German government bonds to the amount of EUR 1.6 billion.
Holdings of Spanish bonds were, on the other hand, reduced further (EUR -3 billion). This was mainly attributable to banks reducing their exposure to Spanish banks. Banks, pension funds and insurers also disposed of their Spanish debt paper.

Graph Foreign exposure of the Dutch financial sector by counterpart sector

Not only did the exposures to the rest of the euro area increase, so did exposures to countries outside the euro area, such as the United States and the United Kingdom. As they did in the euro area, the favourable stock market trends contributed to the rise in exposures to these countries. In addition to this, the banks' exposures to the British private sector were expanded.  The pension funds' exposures to the United States increased by EUR 9 billion. This can be traced back to purchases of equities and bonds in particular of US non-financial companies, which were partly financed by disposals of European debt paper.