Featured Product

    NBB Sets Countercyclical Buffer Rate at 0.5% in Belgium

    June 28, 2019

    NBB announced its plans to increase the countercyclical buffer (CCyB) rate for credit risk exposures to the Belgian private non-financial sector from 0% to 0.5% for the third quarter of 2019. This decision is subject to a one-year implementation period, which means that the CCyB rate of 0.5% will become binding from July 01, 2020.

    CCyB is a temporary buffer that is built during the upward phase of the credit cycle to ensure sufficient absorption capacity for banks to have sufficient margin to cover credit losses during the downward phase of the cycle. The activation of CCyB by NBB is purely preventive, in line with the principles of the macro-prudential policy. In view of the acceleration of the Belgian credit cycle for the private non-financial sector, a precautionary and gradual buildup of CCyB is justified to ensure sufficient resilience in the Belgian banking sector, to secure the necessary absorption capacity for potential credit losses and to safeguard the continuity of credit supply to the Belgian economy going forward. These buffers will be immediately released in the event of a financial shock. Should cyclical systemic risks decrease and the credit cycle turn, these additional buffer requirements will be relaxed toward a 0% neutral level, commensurate with the cycle.

    The measure entails the buildup of an additional (countercyclical) buffer of approximately EUR 1 billion for the Belgian banking sector. Given the current solvency position of Belgian banks and the imposition of a relatively limited 0.5 % buffer rate, this measure should not disrupt credit pricing or credit availability to the Belgian economy. NBB has adopted this measure as a precaution in light of an accelerating credit cycle. However, NBB is also taking due account of the current economic uncertainty. In this context, NBB stands ready to withdraw the measure if a significantly negative and persistent shock were to occur during its phase-in period, to avoid any procyclical effects of the measure.

     

    Related Links

    Keywords: Europe, Belgium, Banking, CCyB, Systemic Risk, Credit Risk, Macro-Prudential Policy, NBB

    Featured Experts
    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    EP Reaches Agreement on Corporate Sustainability Reporting Directive

    The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).

    June 21, 2022 WebPage Regulatory News
    News

    PRA Consults on Model Risk Management Principles for Banks

    The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.

    June 21, 2022 WebPage Regulatory News
    News

    EC Regulation Amends Standards for Calculating Credit Risk Adjustments

    The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    BIS Bulletins Discuss DeFi Lending and Aspects of Crypto-Assets

    The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8292