## 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](https://www.imf.org/en/publications/cr/issues/2023/12/07/belgium-financial-sector-assessment-program-financial-system-stability-assessment-542059)

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## Bibliographic details
- Published: December 8, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400261862.002

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### 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.

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_Source: https://www.imf.org/en/publications/cr/issues/2023/12/07/belgium-financial-sector-assessment-program-financial-system-stability-assessment-542059_