Belgium: Financial System Stability Assessment

IMF Staff Country Reports, March 8, 2018

Source details

The paper assesses the stability of Belgium’s financial system.
The financial sector remains resilient in the face of the rising cyclical vulnerabilities, but there is a need for closely monitoring risks.
Stress tests on banks and insurance companies confirm that they can absorb credit, sovereign, and market losses in the event of a severe deterioration in macro-financial conditions.
The risk of interbank contagion through direct exposures is low.
Insurance companies are generally resilient; losses incurred by those that belong to banking groups do not threaten the soundness of those groups.

Rising cyclical vulnerabilities warrant close monitoring of risks across the financial sector.
Key vulnerabilities tested include credit, sovereign, and market losses under severe macro-financial deterioration scenarios.
Interbank contagion risk through direct exposures is assessed as low.

Subject: Banking, Commercial banks, Financial institutions, Financial services, Insurance companies, Loans, Mortgages, Shadow banking
Keywords include: asset, asset encumbrance, asset encumbrance ratio, assets of shadow bank, bank, bank assets, banking system assets, BNP Paribas, Commercial banks, CR, encumbrance ratio, Global, Insurance companies, interest rate, IRB bank, ISCR, Loans, mortgage, Mortgages, NBB, NBB regulation, peer bank, resilience to liquidity stress, return on equity