## 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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## Bibliographic details
- Published: December 8, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400262234.002

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### Summary and Scope
- 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).

### Main Findings
- 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.

### Policy Recommendations and Operational Actions
- 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 and Metadata
- 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*

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_Source: https://www.imf.org/en/publications/cr/issues/2023/12/07/belgium-financial-sector-assessment-program-technical-note-on-regulation-and-supervision-of-542164_