Question discussed at the 2010 general meeting

As regards supervision of financial institutions, the Belgian authorities recently decided to bring in the so-called "twin peaks" system. This involves giving the central bank, which is already in charge of macro-prudential oversight of of the financial sector as a whole, what is referred to as micro-prudential control over individual establishments, while a separate institution ensures that the markets are operating properly, that the rules of conduct governing the provision of financial services and products are being respected, and also makes sure that the consumer of financial services is kept well-informed and also protected adequately. 

In practical terms, a draft law recently appoved by parliament provides for the CBFA's competence in the field of prudential supervision of credit institutions, insurance companies, stockbroking firms and various other types of financial institutions to be transferred to the National Bank. The new-look CBFA will be responsible for all aspects of oversight of financial markets and listed companies. Being a listed company itself, the Bank will therefore remain subject to the CBFA's regulatory control. So, in no circumstances can there be any question of a conflict of interest, especially since the links between the Bank and the CBFA, required by the law adopted in 2002, will be to a very large extent removed. 

The actual costs incurred by the Bank in exercising prudential supervision tasks will be financed entirely by the institutions overseen, as is currently the case with the CBFA carrying out this supervisory role. 

The risk of liability associated with competences in the field of financial sector supervision led to a system of legal immunity being provided for by law, as is the case in many countries and as recommended by the Basel Committee on Banking Supervision. More specifically, Article 68 of the Law of 2 August 2002 on the supervision of the financial sector and on financial services stipulates that the CBFA, the members of its bodies and the members of its staff shall not bear civil liability for their decisions, acts and conduct in the exercise of the legal tasks of the CBFA, save in the event of fraud or gross negligence.

The draft law approved by parliament, which redesigns the structure of financial sector supervision, empowers the King "notably, to determine, for the tasks transferred, the liability regime applicable to the NBB, the members of its bodies [and] the members of its staff". The Bank is working on the assumption that it will enjoy a system of legal immunity similar to that currently applying to the CBFA.