NBB Publishes Guidance for Banks and Insurers Offering Home Loans
NBB published prudential expectations for banks and insurers offering home loans and has set thresholds for a series of indicators to serve as benchmarks for granting a mortgage loan. The new expectations will come into force on January 01, 2020. NBB urged financial institutions to exercise more restraint in granting mortgage loans with very high loan-to-value ratios. It also urged institutions to take better account for household indebtedness and monthly repayment burden.
The new expectations come on top of the measures that already apply for exposures to the real estate market. While the previous measures were designed to ensure the bank resilience, this latest initiative is geared more to encouraging banks and insurers to assume a more prudent lending policy. In the event of failure to comply with the expectations, the bank or the insurance company in question must be able to provide NBB with a reasoned explanation, in accordance with the comply or explain principle.
NBB had announced, on September 05, that it intended to establish new prudential expectations for Belgian banks and insurance companies that grant mortgage credit. This initiative from NBB follows on from an analysis it carried out that revealed a further increase in the vulnerability of the mortgage market in this country over the last few years and even in recent months. ESRB reached the same conclusion in a recent report on Belgium. Over the last few weeks, NBB has been holding a round of consultation on the subject for the financial sector.
Related Link: News Release
Keywords: Europe, Belgium, Banking, Insurance, LTV, Credit Risk, Residential Mortgage Lending, ESRB, NBB
Previous Article
IASB Publishes Meeting Updates for October 2019Related Articles
LEI ROC Confirmed as Governance Body for OTC Derivatives Identifiers
FSB confirmed the Regulatory Oversight Committee (ROC) of the Global Legal Entity Identifier System (GLEIS) as the International Governance Body for the globally harmonized identifiers used to track over-the-counter (OTC) derivatives transactions, with effect from October 01, 2020.
FCA Consults on Regulation of International Firms in UK
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
EBA Launches Transparency Exercise for Banks in EU
EBA launched the seventh annual transparency exercise for banks in EU.
EBA Publishes Single Rulebook Q&A Updates in September 2020
The EBA Single Rulebook question and answer (Q&A) tool updates for this month include answers to 32 questions.
MAS Amends Notices on NSFR and Single Counterparty Credit Exposures
MAS published amendments to the Notice 652 on net stable funding ratio (NSFR), along with the related reporting template.
EC Publishes Action Plan for Capital Markets Union in EU
EC published the action plan to enhance the Capital Markets Union in EU over the coming years.
EC Proposes Frameworks for Crypto-Assets and Operational Resilience
EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.
ECB Publishes Opinion on Proposals to Amend Securitization Framework
ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.
APRA Updates Validation and Derivation Rules in September 2020
APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
MAS Amends Notice on Capital Adequacy Requirements of Banks
MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.
