European debt, real estate losses are main financial threats

The European debt crisis remains the largest threat to financial stability in the Netherlands while growth in emerging markets is pushing up commodity prices and inflation, the Dutch central bank says it its latest financial statement.

The European debt crisis, combined with increasing differences between euro countries, is enlarging the risk. In addition ‘the risk remains that financial institutions will be hit by further price falls on European real estate markets,’ the bank says.
‘In order to prevent losses from remaining hidden, it is essential that banks, insurers and pension funds are transparent about their investments in real estate and in countries that have been hit by the sovereign debt crisis,’ the bank says.
‘At the same time, the value of these investments must be estimated with sufficient caution.’

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