Belgium simplifies capital buffers, increases CCyB by 25bp

The National Bank of Belgium has taken proactive steps to recalibrate its macro-prudential policy. On November 7, the central bank announced an increase of the counter-cyclical buffer (CCyB) from 1% to 1.25%. The policy adjustment will be effective from January 1st, with lenders given until July 1st to meet the required capital levels.

The bank also stated that it would abolish the mortgage-specific capital buffer, which it introduced in 2020. This measure was said to have a tangible effect on improving the stability of Belgium’s financial sector.

This move simplifies the capital buffer system in Belgium, folding mortgage-specific measures into a single, general buffer. It reflects the bank’s ongoing commitment to maintaining financial stability while also streamlining its regulatory framework.

These decisions align with the National Bank of Belgium’s commitment to ensure a robust and resilient banking sector that can withstand economic shocks. By increasing the CCyB and simplifying capital buffers, the bank aims to strengthen the sector’s risk absorption capacity, promote sustainable lending, and ultimately preserve financial stability in Belgium.

It’s worth noting that the adjustments in the macro-prudential policy structure are not merely administrative changes. They are strategic moves designed to safeguard Belgium’s financial sector from potential crises.

The National Bank of Belgium’s proactive approach towards financial stability underscores its expertise and authoritativeness in the banking sector and its commitment to maintaining a robust and resilient banking system. It reflects the bank’s experience in managing financial risks and its trustworthiness in ensuring economic stability in Belgium.

The original source of the information can be found Here.