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Dutch structured finance industry will boost economic recovery

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The securitisation market in The Netherlands is ideally placed to bounce back from recent worldwide economic difficulties and is expected to play a leading part in the global recovery.

This was the over-riding message from members of a panel of presenters at a structured finance event in Amsterdam this week.

Taking place at the World Trade Centre in the Dutch capital and organised by trust and fiduciary services provider Equity Trust, the "Rebound of Structured Finance" event attracted an audience of more than 70 intermediaries from The Netherlands.

Keynote speaker Sjoerd van Keulen (pictured), chairman of the Holland Financial Centre, told delegates that the Dutch securitisation market had proved robust during recent global tribulations.

This included the bankruptcy of Lehman Brothers, when the transparency achieved through mandatory registration with the Dutch Central Bank helped to trace titleholders and accurately assess liabilities.

“The Lehman example suggests that securitisation ‘à l’Hollande’ could well be a viable proposition in the post-crisis world,” said Sjoerd. “This would provide financial agents with access to a well-regulated, transparent and standardised financial market that would still allow for financial innovation, albeit at a slower pace, as well as for the dispersal and cost-effective management of risk.”

Jeroen Drost, chairman and chief executive of NIBC Bank NV, provided more background to the global crisis and endorsed the positive role that structured finance could play.

“Securitisation could greatly aid the world economic recovery by acting as the bridge between banks and institutional investors, unlocking new pockets of liquidity,” he said. “Provided that the structuring is done in a prudent and transparent way, Dutch mortgages have proven to be a solid base for securitisation in recent years. The covered bonds market turned out to be a solid market as well, especially in Germany.”

Jeroen predicted significant cost increases for banks in the future, based on increased regulation via both the Basel III accord and the Capital Requirements Directives II and III, and said that institutional investors would play a larger role in credit markets, attracted by increased transparency and the potential of investing in tandem with banks. He concluded by stressing the significance of getting the message right.

“Regaining confidence in structured finance products by educating investors, regulators and the general public is of paramount importance,” he said.

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