{
  "title": "Belgium: Financial System Stability Assessment-Technical Note- Stress Testing the Banking and Insurance Sectors and Systemic Risk Analysis",
  "publication": "IMF Staff Country Reports, March 8, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2018/03/08/belgium-financial-system-stability-assessment-technical-note-stress-testing-the-banking-and-45705",
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  "summary": "This Technical Note discusses the results of the stress testing of Belgium’s banking and insurance sectors. Belgium’s financial sector remains resilient in the face of the rising cyclical vulnerabilities, but there is a need for closely monitoring risks.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- The Technical Note discusses results of stress testing of Belgium’s banking and insurance sectors.\n- Belgium’s financial sector remains resilient in the face of the rising cyclical vulnerabilities, but there is a need for closely monitoring risks.\n- Stress tests confirm that banks and insurance companies can absorb credit, sovereign, and market losses in the event of a severe deterioration in macro-financial conditions.\n- All banks meet minimum capital requirements and none needs to draw down its capital conservation buffer over the stress horizon.\n- The risk of interbank contagion through direct exposures is low.\n- Insurance companies are generally resilient; losses in the stress scenarios by insurers that belong to banking groups do not threaten the soundness of those groups."
    },
    {
      "heading": "Stress testing results for banks",
      "content": "- Banks can absorb credit, sovereign, and market losses under severe macro-financial stress scenarios.\n- All banks meet minimum capital requirements over the stress horizon.\n- No bank needs to draw down its capital conservation buffer over the stress horizon.\n- Interbank contagion risk through direct exposures assessed as low."
    },
    {
      "heading": "Stress testing results for insurance companies",
      "content": "- Insurance companies are generally resilient to the modeled stress scenarios.\n- Losses incurred by insurance companies that belong to banking groups do not threaten the soundness of those banking groups."
    },
    {
      "heading": "Systemic risk and contagion analysis",
      "content": "- Direct interbank exposures imply a low risk of contagion through direct links.\n- Banking-group affiliation of some insurance companies does not produce systemic threat to those groups under the stress scenarios analyzed."
    },
    {
      "heading": "Policy implications and monitoring",
      "content": "- Continued close monitoring of rising cyclical vulnerabilities in Belgium’s financial sector is warranted.\n- Maintain supervisory attention on credit, sovereign, and market risk channels tested in the stress scenarios.\n- Monitor capital positions to ensure banks continue to meet minimum requirements and preserve the capital conservation buffer over the stress horizon.\n\n---\n\n Content in this bundle\n\n- Country Report\n  - Country Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Country Report (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: March 8, 2018",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781484345870.002",
    "The Technical Note discusses results of stress testing of Belgium’s banking and insurance sectors.",
    "Belgium’s financial sector remains resilient in the face of the rising cyclical vulnerabilities, but there is a need for closely monitoring risks.",
    "Stress tests confirm that banks and insurance companies can absorb credit, sovereign, and market losses in the event of a severe deterioration in macro-financial conditions.",
    "All banks meet minimum capital requirements and none needs to draw down its capital conservation buffer over the stress horizon.",
    "The risk of interbank contagion through direct exposures is low.",
    "Banks can absorb credit, sovereign, and market losses under severe macro-financial stress scenarios.",
    "All banks meet minimum capital requirements over the stress horizon.",
    "No bank needs to draw down its capital conservation buffer over the stress horizon.",
    "Interbank contagion risk through direct exposures assessed as low.",
    "Losses incurred by insurance companies that belong to banking groups do not threaten the soundness of those banking groups.",
    "Direct interbank exposures imply a low risk of contagion through direct links.",
    "Continued close monitoring of rising cyclical vulnerabilities in Belgium’s financial sector is warranted.",
    "Maintain supervisory attention on credit, sovereign, and market risk channels tested in the stress scenarios.",
    "Monitor capital positions to ensure banks continue to meet minimum requirements and preserve the capital conservation buffer over the stress horizon.",
    "**Country Report**"
  ],
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