17 March 2022
The European Banking Authority (EBA) today published an Opinion following the notification by the National Bank of Belgium (NBB) of its intention to activate a new systemic risk buffer (SyRB). The measure is introduced in light of the macroprudential risks in the Belgian economy related to the substantial level of systemic risk in banks’ mortgage portfolios and the related financial system vulnerabilities. The EBA does not object to the introduction of the measure.
In its Opinion, addressed to the European Commission, the EBA acknowledges the macroprudential vulnerability concerns in the Belgian economy raised by the NBB in relation to the substantial level of systemic risk in banks’ mortgage portfolios.
Based on this analysis, the EBA welcomes the introduction of the new sectoral SyRB of 9%, which will enter into force on 1 May 2022. The intended SyRB applies to nine institutions in Belgium and a specific subset of exposures, i.e. retail exposures to natural persons calculated under the internal ratings based (IRB) approach and secured by residential property for which the collateral is in Belgium.
The EBA welcomes the replacement of the existing Article 458 CRR measure by the new sectoral SyRB and the compliance of the notified measure to identify the subset of sectoral exposures according to the applicable EBA Guidelines.
As part of its assessment, the EBA invites the competent authority to continue reminding Belgian IRB banks of the need to review their internal models and to address any potential deficiencies affecting their resilience in the event of a severe downturn in the Belgian residential real estate market.
Franca Rosa Congiu