Belgium: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions

IMF Staff Country Reports, December 8, 2023

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Canonical URL: Belgium: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions

Focus: technical note on regulation and supervision of less significant institutions (LSIs) in Belgium.
Undertaking: Financial Sector Assessment Program (FSAP) targeted review of Belgium’s Less Significant Institutions (LSI) and third-country branches (TCBs) banking regulation and supervision.
Supervisory authorities assessed: National Bank of Belgium (NBB) and Financial Services and Markets Authority (FSMA).

NBB and FSMA have well-established processes for prudential, product and conduct supervision of LSIs.
NBB’s overall supervisory approach is adequate.
Areas identified for enhancement:
- Regulatory framework for corporate governance could be enhanced.
- Internal decision-making processes and the underpinning of certain decision proposals could in some specific instances be enhanced.
- NBB’s internal supervisory processes would benefit from some fine-tuning and continued attention.
Resourcing and risk focus:
- NBB should continue to ensure adequate staffing for LSI and TCB supervision.
- NBB should continue to carefully consider how to address any supervisory Information Technology risk concerns.
Monitoring and information sharing:
- Banks’ internal capital target could usefully be added to the NBB’s internal monitoring.
- A structured approach for conduct risk and consumer protection information sharing with the FSMA and the Ministry of Economic Affairs should be put in place.

Enhance the regulatory framework for corporate governance applicable to LSIs.
Strengthen internal decision-making documentation and the substantiation of decision proposals where gaps were identified.
Fine-tune NBB internal supervisory processes and maintain ongoing attention to their operation.
Ensure adequate staffing levels for LSI and TCB supervision at the NBB.
Address supervisory Information Technology risk concerns through continued consideration and appropriate measures.
Add banks’ internal capital target to NBB internal monitoring frameworks.
Establish a structured information-sharing approach on conduct risk and consumer protection between NBB, FSMA, and the Ministry of Economic Affairs.

Publication series: IMF Staff Country Reports
Title repeated: Belgium: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Less Significant Institutions
Date on page: December 8, 2023
Pages: 26
Volume: 2023
Issue: 391
DOI: https://doi.org/10.5089/9798400262234.002
Stock No: 1BELEA2023009
ISBN: 9798400262234
ISSN: 1934-7685
Subject keywords: Bank legislation, Bank supervision, External balance assessment (EBA), External position, Financial regulation and supervision, Financial Sector Assessment Program, Financial sector policy and analysis, International organization, Monetary policy
Keywords: Bank legislation, Bank supervision, Belgium LSI sector, Belgium's Less Significant Institutions, credit institution, External balance assessment (EBA), Financial Sector Assessment Program, Global, LSI sector, market development, NBB governance Manual

IMF Staff Country Reports