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Dutch pension funds need to be extra alert to financial risks. In response to the problems in the UK, regulator De Nederlandsche Bank (DNB) is calling on funds to carefully study the financial situation.
business newspaper financial times He writes about the appeal, which came after British pension funds scrambled to dump British government bonds. Its value fell sharply after Prime Minister Truss’ controversial plans to increase the budget deficit.
According to the newspaper, Dutch pension funds should hold more cash and other assets that can be quickly converted into cash.
Bank De Nederlandsche says that there are no problems with pension funds, but advises them to prepare for severe developments in the financial markets. “The situation in the UK has once again shown how important this is,” a DNB spokesperson said.
Pension funds hedge against the risk of a rapid rise in interest rates and hold guarantees. When interest rates rose rapidly due to a collapse in confidence in Britain’s public finances, money with additional money had to come in. British funds sold British debt securities for this purpose. This quickly depreciated in value, forcing pension funds to quickly make more resources available.
This could also happen in the Netherlands, although the risk is less here, Klaas Knott, head of DNB, told the Dutch newspaper last week. fed.
“UK pension funds are big on UK government bonds. Dutch pension funds have diversified their investments, because they are not exposed to exchange rate risk within the eurozone. In addition, the protective requirements in the Netherlands are higher than in the UK. So it takes a lot longer before they can It gets to the point where you have to sell it to meet the warranty requirements.”
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