We entered the Great Recession over-invested in residential real estate, and we are not likely to see a strong housing recovery until the surplus inventory of foreclosed and distressed properties declines. Even as the economy rebalances, housing and related sectors are not likely to return to those pre-recession highs, nor should we expect them to do so.
In that period, we had two bank failures, but the crisis also affected more systemically important banks and there was no resolution framework in place. The Dutch government had to support banks with taxpayers’ money. This resulted in a difficult balancing act: maintaining public confidence while retaining critical bank functions.