National Bank maintains capital buffer for financial institutions at 0%

On 7 December 2021, the National Bank of Belgium (NBB) decided to maintain the “countercyclical buffer rate” at 0% for the first quarter of 2022. Belgian financial institutions are therefore not required to build additional buffers for the risks related to their supply of credit to the real economy in Belgium.

The NBB takes a decision on this issue every quarter, in accordance with its powers under the Banking Law of 2014.

On 11 March 2020, the NBB had announced that it would fully release the countercyclical capital buffer in response to the economic challenges posed by the outbreak of the COVID-19 pandemic. It does not expect to increase this buffer until the second quarter of 2022. The NBB’s decision is based on current projections and risk assessments.

For the moment, the NBB interprets one of its indicators, the so-called credit gap, with caution. This indicator measures the deviation of the credit/GDP ratio from its long-term trend. The marked decline in GDP in 2020 led to an automatic increase in this indicator, which might give an erroneous impression of the dynamics of the credit cycle.

The NBB will review the situation on a quarterly basis.