AFM lists trends and risks for the financial sector


The Dutch Authority for the Financial Markets (AFM) is publishing its Trend Monitor, its annual analysis of trends that will affect the financial sector and its supervision in the coming years, today. The continuing low level of interest rates, ever-evolving digitalisation and increasing attention to sustainability are the most influential issues.

‘In the Trend Monitor, we describe various issues that require attention. In some cases, it is up to the sector to deal with them. Other issues require effort on the part of supervisors and policymakers,’ explains AFM chair of the Executive Board Laura van Geest. ‘This edition is presented with a degree of modesty. Last year’s Trend Monitor contained no mention of a pandemic or a scenario in which our economy would contract by 9 per cent in a single quarter.’

The coronavirus crisis is reinforcing the existing trends of low interest rates and digitalisation

These unforeseen developments are mainly reinforcing what was already happening. The coronavirus shock would seem to have postponed any return to higher interest rates for a couple of years and also to have accelerated the pace of digitalisation. The crisis will probably also strengthen the trend towards a more regional organisation of global production chains, initiated originally for protectionist motives. In the longer term, this could also have consequences for today’s highly internationalised financial markets.

In addition to listing the major trends, the 2021 Trend Monitor looks at three issues in more detail.

Danger that lending to homeowners will get out of step with lending standards

The previous crisis led to a tightening of the lending standards for mortgages, with the aim of improving consumer protection. This cautiousness has been increasingly abandoned in recent years, exposing large groups of households to potential financial problems in the event of an economic downturn. An additional concern is that other payment obligations, such as student debt, a municipal starter loan or a private lease contract, are not always taken into account in a mortgage application. ‘The social importance of sustainability improvements and access to the housing market for first-time buyers is beyond dispute, but this must not be at the expense of financial resilience,’ adds Laura van Geest. ‘Higher borrowing does not solve the underlying problem of lack of housing supply either. It drives up prices and thus puts the housing market even further out of reach for first-time buyers.’

Transparency essential for effective competition between stock exchanges in the European capital market

Businesses in Europe are still heavily dependent on bank financing. Better access to the capital markets can make the economy stronger, particularly in times of crisis when bank buffers are under pressure. The increased competition between trading platforms conflicts with the aim of creating a common European capital market, as it fragments trading. The Trend Monitor stresses the importance of transparency between platforms, so that a single virtual European liquidity pool can co-exist with competition.

The hunt for personal financial data is introducing new supervisory issues

More and more companies are trying to access personal financial data. Not only is this made easier by developments in technology, European regulation is encouraging it. There are now new market structures in which fintech companies and tech giants are moving into financial services. While this boosts innovation and competition and can therefore benefit consumers, there are also new risks, with some innovations undermining customer’s interests. There are also new supervisory issues, such as more complex IT risks, the need for closer cooperation with data supervisors and the dependency on the tech giants. The Trend Monitor addresses these issues in greater detail.

Journalists may contact Yolanda Bieckmann, AFM spokesperson, on +31 (0)6 31 777 686 or 

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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