Pension funds prepared to invest in mortgages, give more air to banks

Dutch pension funds are now prepared to help finance banks’ mortgage portfolios, giving them more room to make new loans, the Financieele Dagblad reports on Tuesday.

The thesaurier-generaal – the finance ministry’s top civil servant – has been negotiating with pension funds, government officials and banks for almost three years in an effort to kick start the housing market and the economy.

The breakthrough means ‘pension funds get a higher return, the state does not take any further risks and banks will have lower financing costs,’ Kees van Dijkhuizen is quoted as saying.

Details

The talks are also focusing on credit for small firms and investment in infrastructure such as roads, schools and hospitals.

Van Dijkhuizen says he expects pension funds will take over mortgages totalling several tens of billions of euros. ‘The details still have to be worked out, and there are no guarantees, but the basic position [of the parties] is positive,’ he said.

Dutch pension funds have reserves totalling €831bn, while the national mortgage debt is €670bn, the paper says.

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