A Fannie Mae for the Netherlands
To stimulate the housing sector and improve the national home ownership percentage, governments often enact policies such as backing mortgage bonds to help. The post-bubble residential property market in the Netherlands is looking for a jolt. Dutch exports have faltered. Some policymakers are calling for a national mortgage bank – sound familiar?
Dutch officials supporting the plan were quick to dismiss the similarities between their proposal and entities like Fannie Mae and Freddie Mac.
One plan gaining traction is for lenders to bundle the safest loans and move them to a proposed entity called the National Mortgage Institute (NMI). This lightening of the balance sheet would enable the lenders to loan more money – augmenting domestic credit markets. The NMI would finance itself by issuing standardize fixed income instruments that are backed fully by the government of the Netherlands.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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