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How does the
Belgian financial
sector work
towards stability
for the future?
Within Europe, Belgium has taken the
lead to implement as soon as possible
the various directives that must strong-
ly reinforce the balance sheets of the
financial institutions. Without stating
that the new rules guarantee absolute
security, the financial sector is never-
theless stronger today than before the
financial crisis. However, although the
financial system has become sturdier,
the question may be raised whether
the financial sector will shy away from
risks too much. That might result in a
delay in growth, a drop in employment
or a reduction of lending.
Each year the National Bank of Belgium
(
NBB) publishes a Financial Stability Review,
in which it reports about economic, financial
and structural developments that may have an
impact on the stability of the financial system.
In the 2012 report, the Belgian financial sector
received both a compliment and a warning. A
compliment because the sector has continued
to finance the economy in spite of difficult
times, and a warning because the National
Bank feared overvaluation of real estate prices.
Therefore the NBB urged the Belgian system
banks, which are the banks that in the event
of bankruptcy could also seriously harm the
rest of the economy, to be careful when grant-
ing mortgage loans. The somewhat ambiguous
message perfectly shows the discord in which
the financial sector finds itself.
After the fall of the American investment bank
Lehman Brothers in September 2008, large
financial institutions throughout the world
experienced problems. At no time did the cri-
sis that followed endanger the payment and
settlement systems, however. Such systems act
as intermediaries in financial transactions and
guarantee that the buyer receives his financial
products and the seller his money. In Belgium,
international players such as SWIFT and Eu-
roclear play a crucial role in this respect.
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