Households lose considerable part of their financial capital due to falling prices

20/01/2009 15:00

The total amount lost by Dutch households over the first three quarters of 2008 as a consequence of the crash on the stock exchange was unprecedented. The value of shares and bonds plummeted and there was indirect loss due to depreciation of investments made by pension funds and insurance companies.

By the end of September 2008, the overall value of shares owned by households was 196 billion euro, i.e. 43 billion down on the end of 2007. Pension scheme losses were much more substantial than the losses suffered by households. Pension fund and insurance company reserves faced a staggering loss as the value plummeted from 944 billion euro at the end of 2007 to 850 billion euro by the end of the third quarter of 2008. The value of bonds owned by households also shrank (3 billion euro). It mainly concerns depreciations.

The total value of household assets was reduced by 152 billion euro over the first three quarters of 2008. The loss was more considerable than in 2001 and 2002, when the total value of household assets was reduced by 43 and 56 billion euro respectively. Depreciation of assets and a continually rising mortgage debt resulted in substantial loss of financial capital by Dutch households over the first three quarters of 2008 of 173 billion euro.

Household capital, situation by the end of the year

Household capital, situation by the end of the year