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

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116