by taking out an additional mortgage loan. although i would be the first to admit that these practices in hindsight seem outrageous, we must remember this : in part the high levels of borrowing by dutch households are the flipside of high mandatory pension savings in the netherlands, where contribution rates of around 20 % of gross income are not exceptional. liquid savings of dutch households – for instance to use for a downpayment – are therefore quite limited. with homeownership being subsidized to this extent, the only viable option for many households to fulfill their housing needs, was to therefore to take out very high mortgage loans. the global financial crisis and policy response as i mentioned before, the global financial crisis followed by the eurocrisis, hit the dutch economy relatively hard. one can imagine that the high ltv - ratios of dutch household and a fall in house prices resulted in many households facing negative home equity. at its peak 35 % of dutch homeowners were “ underwater ”. it will come as a surprise to most of you, but foreclosures and arrears remained at very low levels during this entire period. dutch households always keep meeting their mortgage payments. some believe it is deeply rooted in our calvinist culture. i believe that our strict personal bankruptcy procedures play a large role as well. the position of mortgage creditors in the netherlands is very strong. banks and other creditors may even evict residents from their homes without judicial interference. but while households kept making their monthly payments, they had to drastically cut consumption. fout! onbekende naam voor documenteigenschap. relationship house prices and consumption ( estimated coefficient ) 0, 2 correlation coefficient 0, 7 0, 1 0, 0 - 0, 1 home ownership with a loan ( % population ) figure 4 : correlation of houseprices and consumption for selected countries. dnb bulletin ( 2018 ) link. a recent study at dnb showed how, internationally, the response of consumption to changes in house prices is positively related to the share of households with a mortgage loan. the dot in the top right corner of figure 4 represents the netherlands. so while the direct losses for financial institutions were relatively low, the macroeconomic consequences were severe. the recession following the financial crisis made it clear to policymakers and politicians that mortgage debt had risen far beyond optimal levels in the netherlands and led to excessive macroeconomic volatility. finally the time seemed right for a discussion on the effects

openness and willingness to share information. but there are limits to what supervision can do. we cannot supervise everything, even if we want to. do we have to double our number of supervisors, or triple them? will that be enough? and we have to realise that more supervision and rules also creates a moral hazard problem, because we take away the incentive for institutions and clients to take their own responsibility and use common sense when engaging in financial products. a good example of this is the deposit guarantee scheme. if one would keep on increasing the guarantee level, clients eventually become less alert and institutions might lower liquidity buffers. both dangerous developments. it is therefore that i would like to stress today the fact that market participants have to recognize their own responsibilities too, and act more according to them. this applies to institutional managers, traders, fund managers, accountants, and even customers. more than ever before should all market participants consider the consequences of their actions and continuously ask oneself questions about everything one does. in answering such questions i think that a prudent attitude must be taken and greater awareness of one ’ s social responsibility, and ask one every time whether the right thing has been done and whether the actions are not harmful to vulnerable parties. i think that an important step in the awareness of one ’ s own responsibility is aiming for greater openness. transparency is really something that should be improved. because only when customers really understand financial products ; or when the public understands compensation decisions, or bank managers and supervisors really know which risks an institution is subject to, will trust in the sector be restored. in the end, we may not forget that the financial sector is above all a services sector and this requires a great deal of responsibility and care from the side of all. i would therefore very much invite you to help in bringing greater openness and social responsibility to the financial sector. i hope that i have been able to convince you that there is truly a need for change in the financial sector. not only in terms of regulatory practices but also in terms of attitude and culture. i therefore welcome every initiative from the sector in order to achieve this and i look very much forward to a fruitful debate.