Investors Ready to Help Solve Dutch Crisis, Adviser Says

Dutch institutional investors are ready to help reverse a slump in the housing market by financing more mortgages, said Kees Dijkhuizen, chief financial officer of lender NIBC Holding NV and a government adviser.

“Based on the talks I have had, I’m of the opinion that there is a basis to come to a bigger involvement of institutional investors in mortgage financing,” Dijkhuizen, who was hired to advise on the lending, said in a letter published on the government’s website yesterday. “It is desirable that institutional investors in the Netherlands and abroad play a larger role.”

The Netherlands had the outlook on its AAA credit rating cut to negative last month by Fitch Ratings, which cited banking system problems and difficult economic conditions. House prices slid more than 10 percent last year and have dropped 19 percent since 2008, the national statistics agency said last month.

Under the plan proposed by Dijkhuizen, banks would package most of their home loans that are considered safe in a national mortgage body. The body will self-finance through the issuance of covered bonds guaranteed by the Dutch state that would be sold to pension funds and insurers, he said in the letter.

The proposal could help ease the burden on banks’ balance sheets and become very important to the Dutch economy, Finance Minister Jeroen Dijsselbloem told RTL-Z in a televised interview yesterday.

Household mortgage debt is extremely high and isn’t compensated for by savings, Dijkhuizen’s said. Meanwhile, pension funds have more than $1 trillion in assets, he said. The plan would make it cheaper for people to get mortgages and increase competition for lending, Dijkhuizen said.

To contact the reporter on this story: Fred Pals in Amsterdam at fpals@bloomberg.net

To contact the editors responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net; Frank Connelly at fconnelly@bloomberg.net

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