## Belgium: Financial System Stability Assessment-Technical Note- Stress Testing the Banking and Insurance Sectors and Systemic Risk Analysis

_IMF Staff Country Reports, March 8, 2018_

## Source details

**Canonical URL:** [Belgium: Financial System Stability Assessment-Technical Note- Stress Testing the Banking and Insurance Sectors and Systemic Risk Analysis](https://www.imf.org/en/publications/cr/issues/2018/03/08/belgium-financial-system-stability-assessment-technical-note-stress-testing-the-banking-and-45705)

## Other formats

- [Markdown version](/en/publications/cr/issues/2018/03/08/belgium-financial-system-stability-assessment-technical-note-stress-testing-the-banking-and-45705/index.md)
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## Bibliographic details
- Published: March 8, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484345870.002

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### Summary findings
- 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.
- 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.

### Stress testing results for banks
- 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.

### Stress testing results for insurance companies
- Insurance companies are generally resilient to the modeled stress scenarios.
- Losses incurred by insurance companies that belong to banking groups do not threaten the soundness of those banking groups.

### Systemic risk and contagion analysis
- Direct interbank exposures imply a low risk of contagion through direct links.
- Banking-group affiliation of some insurance companies does not produce systemic threat to those groups under the stress scenarios analyzed.

### Policy implications and monitoring
- 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.

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## Content in this bundle

- **Country Report**
  - [Country Report (Markdown version)](/-/media/files/publications/cr/2018/cr1869.pdf.md){rel="alternate" type="text/markdown"}
  - [Country Report (PDF)](/-/media/files/publications/cr/2018/cr1869.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2018/03/08/belgium-financial-system-stability-assessment-technical-note-stress-testing-the-banking-and-45705_