NBB Maintains CCyB for Banks at 0%, Issues Other Updates
The National Bank of Belgium (NBB) decided to maintain the countercyclical buffer (CCyB) rate at 0% for the first quarter of 2023 and updated the “fit & proper” manual, which sets out the prudential standards to be met by all financial institutions under its supervision. Additionally, NBB and the Financial Services and Markets Authority (FSMA) published an update of the report on asset management and non-bank financial intermediation in Belgium.
The updated “fit and proper” manual follows a number of regulatory developments at the national and international levels and sets out a list of events that should trigger a reassessment of the individual or collective suitability of directors, senior managers (in particular members of the management committee), and persons responsible for independent control functions. The updated manual raises the supervisory expectations regarding time commitment (recommending that members of the management committee and persons responsible for control functions perform their duties full-time), independence of mind (ability to ask questions, challenge proposals, resist groupthink and not be subject to conflicts of interest), and collective suitability (highlighting areas related to technology security, environmental and climate risks, prevention of money laundering and terrorist financing and diversity in the composition of management bodies of banks). One of the main changes is the reclassification of the suitability assessment criteria in five components: managers must possess knowledge, experience, and skills; have professional integrity; act with independence of mind; be able to commit sufficient time to their position; and have a profile that adequately complements that of their colleagues on the management body. In addition, a number of new requirements have been clarified at the organizational level, which include the development of a suitability and diversity policy as well as the implementation of procedures and processes for the selection and succession planning of managers.
The updated report on asset management and non-bank financial intermediation forms part of the periodic monitoring of financial intermediation activities and analyzes the national and international developments in the non-bank financial intermediation sector. The report is intended to stay on top of the risks associated with these activities and their interconnectedness with other sectors. The report finds that the Belgian non-bank financial intermediation sector that undertakes "credit intermediation involving entities and activities outside the regular banking system and therefore lacking a formal safety net" has been relatively stable in recent years. The report highlights that no material risks (that threaten financial stability) have been identified in relation to asset management and non-bank financial intermediation in Belgium. However, the development of those two activities in Belgium and their linkages with other sectors of the economy, including possible reputational risk in financial services groups, should be closely monitored.
- Press Release on CCyB
- Fit and Proper Manual
- Press Release on Asset Management and NBFI
- Report on Asset Management and NBFI (PDF)
Keywords: Banking, CCyB, Basel, Regulatory Capital, NBB, Europe, Non Bank Financial Intermediation, Belgium, Financial Stability
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