Belgium: Financial Sector Assessment Program-Financial System Stability Assessment
IMF Staff Country Reports, December 8, 2023
Source details
- Canonical URL
- Belgium: Financial Sector Assessment Program-Financial System Stability Assessment
Other formats
Bibliographic details
- Published: December 8, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400261862.002
Overview
- Paper focuses on the report on Belgium’s Financial Sector Assessment Program.
- Economic context:
- Economic activity has slowed.
- Core inflation remains high.
- The fiscal outlook is challenging.
- Financial sector resilience:
- The financial sector has remained resilient despite a series of shocks.
- Key financial stability risks emanate from the large, concentrated, and interconnected banking sector, private sector indebtedness, and high exposure to real estate.
Stress testing and solvency
- Bank solvency stress tests indicate that the financial sector is resilient under severe macroeconomic shocks.
- Although there is some heterogeneity across financial institutions, all banks would satisfy the minimum capital criteria.
- Keywords and methodologies highlighted: bank solvency stress tests, insurance solvency stress test, Stress testing, cash flow.
Major risks and vulnerabilities
- Large, concentrated, and interconnected banking sector.
- Private sector indebtedness.
- High exposure to real estate.
- Heterogeneity across financial institutions despite aggregate resilience.
Policy recommendations
- Enhance the National Bank of Belgium’s powers to set macroprudential policy in line with its financial stability mandate.
- In the near term, the extension/ setting of capital requirements should be streamlined, without the requirement for government approval.
- Strengthen the corporate governance framework and expectations for banks.
- Boost prudential supervisory staffing, especially given upcoming regulatory developments.
- Improve NBB coordination and overall bank oversight.
Subject tags and keywords (as provided)
- Subject: Asset and liability management; Financial institutions; Financial Sector Assessment Program; Financial sector policy and analysis; Financial sector stability; Insurance companies; International organization; Monetary policy; Stress testing.
- Keywords: B. bank Oversight; bank solvency stress tests; cash flow; corporate governance framework; Europe; Financial Sector Assessment Program; Financial sector stability; Global; Insurance companies; insurance solvency stress test; market share; NBB coordination; Stress testing.
Content in this bundle
- 1belea2023006