Kingdom of the Netherlands–The Netherlands: Financial System Stability Assessment

International Monetary Fund

No 2024/087, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper on the Kingdom of the Netherlands focuses on the Financial System Stability Assessment. The Financial Sector Assessment Program took place against slowing economic growth amid tighter financial conditions, elevated housing prices, large and interconnected nonbanks with major pension reforms underway, and increased securities market trading after Brexit. The Netherlands also faces climate challenges related to sea level rise and more frequent extreme rainfall, as well as the need to bring down nitrogen depositions, which currently exceed critical values, threatening biodiversity loss. The systemic risk analysis focused on housing, non-banks, and climate, and found that financial institutions are broadly resilient to the adverse macrofinancial scenarios considered in this assessment, though the risks for corporates and some households remain elevated. The climate physical risk analysis suggests that banks and insurers are largely resilient to a wide range of flood events. It is imperative to ensure operational readiness for resolution, develop, and regularly test a national financial crisis management plan.

Keywords: mortgage interest deductibility; risk analysis; coverage ratio; climate risk oversight; bank solvency stress test; Climate change; Pension spending; Insurance companies; Financial sector stability; Global (search for similar items in EconPapers)
Pages: 70
Date: 2024-04-08
New Economics Papers: this item is included in nep-eec, nep-env and nep-eur
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