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Tougher bank rules could threaten Dutch mortgage supply - govt agency
June 6, 2017 / 3:36 PM / 5 months ago

Tougher bank rules could threaten Dutch mortgage supply - govt agency

AMSTERDAM, June 6 (Reuters) - Stricter international banking rules could hurt the supply of mortgages in the Netherlands, possibly harming a key engine behind the country’s economic recovery, a government policy body said on Tuesday.

The Netherlands’ Bureau for Economic Policy Analysis (CPB) said rules proposed by the Basel Committee on Banking Supervision would increase the risk profile of Dutch banks and force them to add an estimated 6 billion euros ($6.76 billion) in capital buffers to maintain current portfolios.

The CPB, however, said the banks would likely reduce mortgage lending, rather than raise extra capital, cutting credit to the housing market.

Banks are not the only suppliers of real estate loans in the Netherlands. After a period of strong growth, pension funds and insurers provide almost 30 percent of all new mortgages.

However, their interest in this market could fade when the currently low yields in other asset classes improve, the CPB said.

The housing market in the Netherlands has recovered rapidly, after a price drop of roughly 20 percent between 2008 and 2013.

Rising house prices played an important part in the 2.1 percent growth of the Dutch economy in 2016, which was considerably stronger than the 1.7 percent average in the eurozone. ($1 = 0.8872 euros) (Reporting by Bart Meijer; Editing by Anthony Deutsch and Pritha Sarkar)

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