The term of office for the president of the Dutch Central Bank (DNB) should remain seven years. That’s the view of Thijs Knaap, Chief Economist at APG, who shared his opinion during the investor panel on the BNR Zakendoen radio program.
Eelco Heinen, the outgoing Minister of Finance, wants to reduce the DNB president’s term to five years, with the possibility of a one-time reappointment for another five years. Heinen’s proposal is partly based on concerns from the financial sector, where some fear that the current maximum term of two seven-year periods could lead to tunnel vision. Knaap responded, “The sector shouldn’t have the final say in this. DNB is also a supervisory authority, and that rarely makes it popular.”
To Knaap, DNB represents “rigid steadfastness. That’s important, because a central bank should avoid erratic behavior.” Still, he praised the flexibility shown by Klaas Knot—who stepped down as DNB president yesterday—during his two terms in office. “Especially when it came to the crucial question of what to do when the economy grinds to a halt: cut spending or invest more? Knot started out as a fiscal hawk, but in interviews this past weekend, he explained how his thinking has evolved. Through trial and error, we’ve learned that investing is sometimes wiser than cutting back. The Netherlands and Germany could have done that during the European debt crisis. Fortunately, that lesson was applied during the COVID crisis.”
Alongside Thijs Knaap, Simon van Veen (Fund Manager at the Sustainable Dividends Value Fund) also joined the investor panel. The two further discussed the stock performance of sportswear giant Nike, the upcoming acquisition of TikTok’s U.S. operations, and former President Trump’s ongoing battle with Jerome Powell, the chair of the U.S. Federal Reserve.
Listen to the full (Dutch) broadcast here.