To ensure that Belgian banks have full flexibility to use their ample free capital resources to support the real economy, the NBB decided on 6 September 2022 to maintain the countercyclical buffer (CCyB) rate at 0% for the fourth quarter of 2022.

The NBB counts on Belgian banks to help, where necessary, Belgian households and non-financial corporations cope with the challenges posed by record high energy prices and challenging macroeconomic conditions. The focus should be on (1) ensuring the continuation of an adequate flow of credit to the real economy and (2) proactively offering moratoria and other debt rescheduling options to borrowers experiencing temporary or more structural repayment problems due to high energy bills and rising living or operating expenses. The NBB therefore strongly welcomes the banks’ unilateral commitment to offer, as from 1 October, moratoria to eligible mortgage holders and, more generally, case-by-case solutions to households and non-financial corporations (Febelfin press release of 8 September 2022).

The NBB’s CCyB decision was based on a thorough assessment of all relevant data. Based on this analysis, the activation of a countercyclical instrument no longer appeared justified. Since the last decision (press release of 29 June 2022), the macroeconomic context has worsened and growth forecasts have been revised downwards. There are also preliminary indications that the peak of the financial and credit cycle may have been reached, particularly when considering developments in inflation-adjusted terms.

At the same time, the probability has increased that vulnerabilities — accumulated during the lengthy period of very low interest rates — will trigger losses for the banking sector. While the available asset quality indicators do not (yet) point to an increase in loan repayment problems, banks should look ahead and base their credit risk provisions on sufficiently conservative assessments of potentially stressful economic scenarios and use their current strong capital position to proactively raise loan loss provisions, where necessary.

In the current macrofinancial context still characterised by a high level of uncertainty, the NBB also urges financial institutions to remain cautious in their decisions regarding dividends and other types of profit distributions and to base these decisions on a conservative forward assessment of their capital and provisioning needs in light of potential macroeconomic developments.

The NBB will continue to closely monitor bank credit, moratoria and other forms of debt restructuring. CCyB decisions are revisited each quarter, in accordance with European regulations and the NBB’s macroprudential powers under the 2014 Banking Law.