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Is the sector
giving enough
back in exchange
of the support it
has received?
The government has saved the finan-
cial sector to prevent the Belgian econ-
omy from suffocating and the savings
of the citizens from being jeopardised.
As a result, the sector has been able to
pursue its primary tasks: lending, of-
fering payment systems and generating
employment.
Part of the governmental support is
meanwhile being repaid at a high in-
terest rate.
During the financial crisis, the government
pumped €20 billion in capital increases into
financial institutions in trouble. Moreover,
guarantees were offered due to which the li-
quidity requirements (in other words the ex-
tent to which they can meet their short-term
payments) of a number of financial institu-
tions could be bridged and the savings of Bel-
gian savers could be protected. Part of those
contributions is currently being repaid via a
penalising interest rate up to 8%. This excep-
tionally high interest rate has the unintended
effect that it demands returns from the finan-
cial institutions that are unrealistic in the pres-
ent economic climate.
Safeguarding the financial
system
The financial efforts made by the government
were not so much made to keep the financial
institutions alive but mainly to safeguard the
financial system and keep the economy go-
ing, objectives that were effectively met. The
financial sector has been able to continue its
tasks and to play its role in the framework of
the lending and payment systems. Moreover,
it has continued to play the part of a major
employer.
Since the end of 2007, it has granted €87.3
billion in additional credits to companies,
families and governmental bodies. Those
credits are continuing to contribute to eco-
nomic growth. A piece of KU Leuven research
showed in 2011 that the financial sector
accounted for one fifth of the total economic
growth that took place in Belgium last year.
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Financial stability