Kingdom of the Netherlands-The Netherlands: Financial Sector Assessment Program- Technical Note on Macroprudential Policy Framework

This paper presents a technical note on macroprudential policy framework in The Netherlands. The Financial Sector Assessment Program recommendations aim to address observed gaps and further strengthen the Netherlands’ macroprudential policy framework. Macroprudential policy in the Netherlands has centered on the residential real estate market given the importance of this market for households, banks, and insurers. The current institutional arrangement is broadly in line with IMF guidance for effective macroprudential policy. Surveillance and systemic risk assessment rely on comprehensive quantitative information and on various property market models and stress tests. The willingness to act and the ability to act over the calibration of the borrower-based tools are, however, considered weak. The authorities recently increased the differentiation of the transfer tax to improve the position of owner-occupiers relative to that of buy-to-let investors, but the measure should be calibrated cautiously. Supply-side measures remain critical to limit house price pressures and improve access to homeownership.