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> New financial landscape
However, the crisis did have an impact on the
financial system. Various institutions, includ-
ing several large Belgian ones, had to request
support from the government in various
forms to survive the storm. In those stormy
times, financial institutions however continued
to fulfil their role as financers of the economy.
Both saving banks and large banks did this.
Between the end of 2007 and September 2012,
loans to companies increased by 19.8%, to
families by 30.4% and to government bodies
by 37.4%.
At the same time, the financial institutions
worked on the reinforcement of their balance
sheets (the total of their possessions or assets),
for example by reducing their securities port-
folios, reinforcing their financing from short
to longer term and from market financing to
deposit financing, or decreasing their lever-
age
3
1
.
The reinforcement of the balance sheet
is imposed via Basel III, the capital require-
ments as set by the Bank for International
Settlements in Basel (BIS), an umbrella of the
world’s central bankers. These rules, which
were translated for Europe in the CRD IV
Directive, provide that financial institutions
must maintain more capital and liquidity in
respect of their outstanding investments and
loans. The rules will be gradually implemented
from 2013 and must be fully in force in 2018.
In Europe, the Belgian financial institutions
have taken the lead to comply as quickly as
3.
Leverage reflects the proportion between the equity of a financial
institution and its balance sheet total. Deleverage means therefore
the phasing-out of that leverage, for example by providing from
the equity in proportion to the total balance sheet.
>
Stable financial sector
March 2012
June 2007
1.595,2
1.139,4
-28,6%
March 2012
June 2007
31,9
18,3
-41,4%
March 2012
June 2007
48,5
57,8
+19,3%
Total liabilities of
Belgian banking sector
(
in billions of EUR)
Total equity capital of
Belgian banking sector
(
in billions of EUR)
Leverage (in units)
DELEVERAGING IN THE BELGIAN BANKING SECTOR
(
SOURCE: NBB AND ECB)