Dutch financial markets able to absorb shocks of geopolitical turmoil for now: AFM
The Dutch financial markets have so far been able to absorb the shocks caused by Donald Trump’s presidency to the geopolitical situation, the Dutch Authority on Financial Markets (AFM) said with the presentation of its annual report. Trump’s import tariffs did rock the stock market, but it remained within the margins expected. Action is needed to ensure the markets’ resilience in the changing status quo.
The changing dynamics between Europe and the United States with Trump at the helm is causing concerns in the European markets, also in the Netherlands, said Laura van Geest, chair of the AFM’s executive board. “For the time being, financial markets have smoothly absorbed the shocks caused by unpredictable US policy and policy responses to it.” But it is no time to be complacent.
“Our financial sector is strongly intertwined with the US. Dutch pension funds and households invest a lot in US equities, we are largely dependent on US technology, and a joint supervisory approach is no longer self-evident. This is uncomfortable and makes us vulnerable,” Van Geest said.
Van Geest expects the import tariffs Trump bluntly imposed on Europe and the rest of the world last week will result in more bankruptcies and higher unemployment in the Netherlands. She stressed that the AFM hasn’t run any models yet, calling that complicated at the current time. “Those models are always made for small movements. This is a very large movement.” But it is reasonable to assume that the tariffs will cause problems for Dutch companies, and by extension, for their workers.
The AFM stressed the importance of European cooperation. “The need to achieve the Savings and Investments Union has become more urgent. We can contribute to this by reducing fragmentation in the capital markets and streamlining supervision within the EU,” Van Geest said.
