This countercyclical capital buffer is a piggy bank that the banks have to build up in good times for when the economy is not doing well. That piggy bank used to hold 1 billion euros, but that buffer was released during the corona crisis to give the banks some extra breathing space.
The National Bank decides every quarter whether the buffer can be built up again. At the end of June, she revealed that this would be the case from the autumn. “Because there is less uncertainty about the impact of the interest rate hike on the economy and since the downturn in the credit and real estate cycles has been orderly so far, the NBB now confirms that intention with a formal decision,” it said in a press release on Thursday.
Belgian banks must set aside an additional 2.3 billion euros from 1 October and in a year’s time. Initially, until April 1, 2024, this concerns 1.1 billion euros. At the same time, the NBB will reduce the sectoral systemic risk buffer for Belgian mortgage loans to an amount of 1.3 billion against 2 billion today. This measure will take effect on April 1, 2024. “This increases the global resilience of the banking sector against potentially higher than expected losses,” says the National Bank.