Good news for banks and insurance companies: these sectors, according to the National Bank of Belgium, seem to have little to worry about in the coming years… Details.
“The Belgian banking and insurance sector is healthy and robust. (…) However, several significant challenges still require particular attention.” – National Bank of Belgium (NBB).
Financial Stability Report
The National Bank of Belgium has recently published its 17th Financial Stability Report. In this 182-page document, it primarily aims to evaluate the health of Belgian banks and insurance companies. And the outcome is quite positive. Here’s why.
A considerable amount has happened since the crisis a decade ago, which plunged Belgian financial institutions into the red. They now seem to have significantly recovered. Their current progress, according to the National Bank of Belgium, is largely due to the sector’s extensive restructuring. Add to this the recent changes in regulation and oversight.
Vigilant Attention Needed
However, not everything is rosy… As the NBB continues to emphasize, financial institutions currently face “significant challenges”. By challenges, the National Bank of Belgium primarily refers to the low-interest rates that delight consumers but weaken banks. Additionally, there is noticeable enthusiasm among banks for granting mortgage credits, which raises the risk of over-indebtedness. Finally, particular vigilance is warranted regarding the rise of “cyber risks“ in light of the sector’s “digital transformation”.
While the current situation is favorable, to maintain this status, it’s crucial to remain extremely cautious and vigilant.
To learn more about the topic, check out the full report (in English) by the NBB by following this link.
