16 May 2014
The European Banking Authority (EBA) published today an Opinion following the notification by the National Bank of Belgium (NBB) of its intention to modify capital requirements in order to address an increase in macroprudential or systemic risk that could have a severe impact on the financial system and the Belgian real economy. Based on the evidence submitted by the NBB, the EBA does not object the adoption of the proposed measures, which are in line with Article 458 of the Capital Requirements Regulation (CRR).
In particular, the NBB notified the EBA of its intention to increase risk weights by five percentage points for retail exposures secured by Belgian residential immovable property. The increase, which will apply to those Belgian banks using internal rating-based models (IRB approach), will address asset bubbles in the residential property sectors, thus strengthening the resilience of the Belgian banking sector.
In this Opinion, addressed to the Council, the European Commission and the NBB, the EBA acknowledged that the NBB's request for an additional capital requirement is justified by the potential overvaluation of the Belgian real estate market and does not entail likely negative consequences. However, the EBA has drawn to the attention of the European Commission a number of issues to be taken into consideration.
Franca Rosa Congiu