Act of 25 April 2014 establishing the mechanisms for a macroprudential policy and clarifying the specific tasks conferred on the National Bank of Belgium in the framework of its function of contributing to the stability of the financial system

Title

2014003196

25 APRIL 2014. - Act establishing the mechanisms for a macroprudential policy and clarifying the specific tasks conferred on the National Bank of Belgium in the framework of its mission to contribute to the stability of the financial system

Source: Finances

Publication: 7 May 2014

Number: 2014003196

page: 36986

File number: 2014-04-25/10

Entry into force: 17 May 2014

This text modifies the following text:

1998003158

1 implementing decree

CHAPTER 1. - Preliminary provisions Art. 1-2 CHAPTER 2. - Amendments to the Act of 22 February 1998 fixing the organic status of the National Bank of Belgium Art. 3-24

Text

CHAPTER 1. - Preliminary provisions

Article 1st. This Act regulates a matter referred to in Article 78 of the Constitution.

Art. 2. This Act aims to implement the Recommendation of the European Systemic Risk Board (ESRB/2011/3) of 22 December 2011 concerning the macroprudential mandate of national authorities.

CHAPTER 2. - Amendments to the Act of 22 February 1998 fixing the organic status of the National Bank of Belgium

Art. 3. Article 12 of the Act of 22 February 1998 fixing the organic status of the National Bank of Belgium is replaced by the following:
"Art. 12. § 1st. The Bank contributes to the stability of the financial system. To this end and in accordance with the provisions provided for in Chapter IV/3, it ensures in particular the detection, evaluation and monitoring of the various factors and developments likely to affect the stability of the financial system, it determines, by means of recommendations, the measures that the various concerned authorities should implement in order to contribute to the stability of the financial system as a whole, in particular by strengthening the robustness of the financial system, by preventing the occurrence of systemic risks and by limiting the effects of possible disturbances, and it adopts measures falling within its competence having this objective. The Bank enjoys, for all decisions and operations taken in the framework of its contribution to the stability of the financial system, the same degree of independence as that enshrined in Article 130 of the Treaty on the Functioning of the European Union. § 2. The Bank may also be tasked with the collection of statistical information or international cooperation relating to any mission referred to in Article 10.".

Art. 4. Article 28 of the same Act is replaced by the following:
"Art. 28. The Governor transmits to the President of the Chamber of Representatives the annual report referred to in Article 284, paragraph 3 of the Treaty on the Functioning of the European Union, as well as an annual report on the Bank's missions in the field of prudential supervision of financial institutions and on its missions relating to the contribution to the stability of the financial system referred to in Chapter IV/3. The Governor may be heard by the competent committees of the Chamber of Representatives, at the request of these committees or on his own initiative. Communications made pursuant to this article may not, however, due to their content or circumstances, pose a risk to the stability of the financial system.".

Art. 5. In the same Act, a Chapter IV/3, entitled "Bank's missions in the framework of the contribution to the stability of the financial system" is inserted.

Art. 6. In Chapter IV/3, inserted by Article 5, Section 1 entitled "General provisions" is inserted.

Art. 7. In Section 1, inserted by Article 6, Article 36/32 is inserted drafted as follows:
"Art. 36/32. § 1st. The provisions of this Chapter specify certain tasks of the Bank and the legal instruments related thereto, in the framework of the mission to contribute to the stability of the financial system referred to in Article 12, § 1st.
§ 2. For the purposes of this Chapter, the following terms shall be understood as:
1° "stability of the financial system": a situation in which the probability of discontinuity or disturbance of the functioning of the financial system is low or, if such disturbances were to occur, their consequences on the economy would be limited; 2° "national authorities": the Belgian authorities, whether at federal or regional level, likely, given their respective competences, to implement the recommendations issued by the Bank under this Chapter; 3° "SSM Regulation": Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions; 4° "European supervisory authorities": the European Banking Authority established by Regulation (EU) No 1093/2010, the European Insurance and Occupational Pensions Authority established by Regulation (EU) No 1094/2010 and the European Securities and Markets Authority established by Regulation (EU) No 1095/2010.".

Art. 8. In Chapter IV/3, inserted by Article 5, Section 2 entitled "Detection and monitoring of factors likely to affect the stability of the financial system" is inserted.

Art. 9. In Section 2, inserted by Article 8, Article 36/33 is inserted drafted as follows:
"Art. 36/33. § 1st. The Bank is tasked with the detection, evaluation and monitoring of the various factors and developments likely to affect the stability of the financial system, in particular from the angle of a threat to the robustness of the financial system or an accumulation of systemic risks. In this framework, the Bank has access to any information useful for this mission. § 2. In particular, for the purposes referred to in paragraph 1st, the Bank is authorized to:
1° use the information it possesses under its other legal missions, as they result from or are specified by or under other legislation, including that governing the status and supervision of financial institutions referred to in Article 36/2 or the supervision on a consolidated basis of these institutions; 2° use the prerogatives regarding access to information it possesses under its other legal missions, as they result from or are specified by or under other legislation, including that governing the status and supervision of financial institutions referred to in Article 36/2 or the supervision on a consolidated basis of these institutions; 3° request information useful for the exercise of this mission from any entity in the private sector not subject to a supervisory status falling within its competence, or, where applicable, via the authorities under which these entities fall. § 3. Notwithstanding the professional secrecy regime to which they are subject, public sector entities, regardless of their level of autonomy, cooperate with the Bank so that it has all the information useful for the exercise of its mission referred to in this article. To this end, this information is communicated to the Bank on its own initiative or upon its request. § 4. For the purposes of this article, the Bank may also conclude collaboration agreements with the Regions, the European Central Bank, the European Systemic Risk Board (ESRB), the European supervisory authorities and competent foreign authorities in the field of macroprudential supervision and communicate confidential information to these institutions.".

Art. 10. In Chapter IV/3, inserted by Article 5, Section 3 entitled "Adoption of legal instruments to contribute to the stability of the financial system" is inserted.

Art. 11. In Section 3, inserted by Article 10, Article 36/34 is inserted drafted as follows:
"Art. 36/34. § 1st. Without prejudice to European directives and regulations, in particular regarding the prerogatives conferred on the European Central Bank in the field of banking supervision including in the macroprudential domain, the Bank may, for macroprudential policy purposes to contribute to the stability of the financial system, exercise all prerogatives, in particular regulatory, provided for by or under this Act or legislation governing the status and supervision of financial institutions referred to in Article 36/2 or the supervision on a consolidated basis of these institutions. In addition to the prerogatives referred to in paragraph 1st, the Bank may, in order to contribute to the stability of the financial system, without prejudice to the competences conferred on the European Central Bank, use the following instruments with regard to financial institutions subject to its supervision:
1° the imposition of additional or stricter capital or liquidity requirements than those provided for by or under prudential legislation, and this for all institutions or by category of institutions under its supervision; 2° the imposition, within the framework of capital requirements, specific requirements according to the nature of exposures or according to the value of collateral received, or according to the sectors of activity or geographic zone from which the debtors fall, which are additional to, or stricter than, those provided for by or under prudential legislation, and this for all institutions or by category of institutions under its supervision; 3° the power to impose quantitative limits on exposures to the same counterparty or a group of related counterparties, or on a sector of activity or geographic zone, which are additional to, or stricter than, those provided for by or under prudential legislation, and this for all institutions or by category of institutions under its supervision; 4° the imposition of limits on the total level of business activities under its supervision relative to their capital (leverage ratio) which are additional to, or stricter than, those provided for by or under prudential legislation, and this for all institutions or by category of institutions under its supervision; 5° the imposition of conditions for the assessment of collateral taken as security for loans granted for the verification of compliance with solvency requirements provided for by or under prudential legislation; 6° the imposition of a total or partial reserve of distributable profits; 7° the imposition of asset valuation rules different from those provided for by accounting regulation for the purpose of the requirements provided for by or under prudential legislation; 8° the power to impose the publication of information, and to set the terms thereof, which are additional to those provided for by or under prudential legislation, and this for all institutions or by category of institutions under its supervision; 9° the power to communicate regarding the measures adopted under this article and their objectives, according to the terms it determines. § 2. When the measures adopted under paragraph 1st, paragraph 2 are of general scope and therefore of a regulatory nature, their adoption requires respect for the royal approval procedure provided for in Article 12bis, § 2, paragraph 3. § 3. For the purposes of this article, the Bank takes into account the recommendations issued by the European Systemic Risk Board (ESRB) as well as the positions or decisions of the European Commission and the European Central Bank, in particular, when the latter has imposed additional capital requirements on credit institutions or other measures aimed at reducing systemic risk. Before implementing the measures referred to in paragraph 1st, the Bank informs the European Systemic Risk Board (ESRB), the European Central Bank as well as, where applicable, the European
supervisory authorities and the European Commission of the concrete measures it intends to implement. Unless duly motivated urgency and unless specific deadlines provided for by Community law concerning the implementation of legal instruments, the Bank waits, for a period not exceeding one month, the reaction of the aforementioned institutions before the concrete implementation of the envisaged measures. The Bank is also required to take into account the objections raised by the European Central Bank or, where applicable, other European authorities when it comes to imposing additional capital requirements on credit institutions or groups to which they belong or other measures aimed at reducing systemic risks.".

Art. 12. In Chapter IV/3, inserted by Article 5, Section 4 entitled "Recommendations issued to contribute to the stability of the financial system" is inserted.

Art. 13. In Section 4, inserted by Article 12, Article 36/35 is inserted drafted as follows:
"Art. 36/35. The Bank determines, by means of recommendations, the measures that the concerned national authorities, the European Central Bank or other European authorities, each for what concerns them, should adopt and implement in order to contribute to the stability of the financial system as a whole, in particular by strengthening the robustness of the financial system, by preventing the occurrence of systemic risks and by limiting the effects of possible disturbances. The Bank ensures the monitoring of its recommendations by verifying their effective implementation, in particular by the concerned national authorities and by evaluating the effects of the measures taken for this purpose. The Bank ensures, in addition, the consistency of this mission with those conferred under Community law, in particular on the European Central Bank in the field of prudential supervision of credit institutions, including in the macroprudential domain.".

Art. 14. In the same Section 4, Article 36/36 is inserted drafted as follows:
"Art. 36/36. The recommendations of the Bank have the exclusive purpose of contributing to the stability of the financial system. They take into account the recommendations adopted by the European Systemic Risk Board (ESRB) as well as the positions or decisions of European institutions such as the European Commission and the European Central Bank. The recommendations are duly motivated and communicated confidentially to the national authorities called upon to implement them as well as to the European Systemic Risk Board (ESRB) and the European Central Bank. When it deems it necessary, the Bank may also address proposals to the European Central Bank or other European authorities provided that the instruments to be implemented fall within their competences. The Bank responds, within the deadlines provided for by Community law, to notifications made by the European Central Bank under Article 5, paragraph 4 of the SSM Regulation, informing it of its intention to raise the capital requirements applicable to credit institutions or to adopt other measures aimed at reducing systemic risk. Any objection raised against such a measure is duly motivated with regard to the European Central Bank.".

Art. 15. In the same Section 4, Article 36/37 is inserted drafted as follows:
"Art. 36/37. Notwithstanding the application of Articles 35 and 36/36 and without prejudice to paragraph 2, the Bank publishes its recommendations. It decides on the terms of this publication.
Communications made pursuant to this article may not, due to their content or circumstances, pose a risk to the stability of the financial system.".

Art. 16. In the same Section 4, Article 36/38 is inserted drafted as follows:
"Art. 36/38. § 1st. In the implementation of the Bank's recommendations falling within their area of competence, national authorities may use all instruments, decision-making powers, regulatory powers and prerogatives provided for by or under the legislation and/or decrees governing their status and missions. § 2. In particular, the King may, by Royal Decree deliberated in the Council of Ministers and on the advice of the Bank, impose on credit providers coefficients:
1° coverage providing for a percentage of the value of collateral beyond which a loan cannot be granted (loan to value ratio); 2° maximum overall indebtedness relative to the borrower's available income.
The Bank's advice is not required when the measure adopted by the King under this paragraph is, in all respects, in conformity with a recommendation of the Bank issued under Article 36/35.".

Art. 17. In the same Section 4, Article 36/39 is inserted drafted as follows:
"Art. 36/39. Without prejudice to specific procedures provided for by Community law, national authorities falling under the Federal State inform the Bank of the concrete measures they intend to implement to comply with its recommendations. The Bank informs, without delay, the European Systemic Risk Board (ESRB), the European Central Bank as well as, where applicable, the European supervisory authorities and the European Commission. Unless duly motivated urgency and unless specific deadlines provided for by Community law concerning the implementation of legal instruments, the concerned authorities wait, for a period not exceeding one month from the communication to the Bank, the reaction of the aforementioned institutions before the concrete implementation of the envisaged measures.".

Art. 18. In the same Section 4, Article 36/40 is inserted drafted as follows:
"Art. 36/40. In the event that the concerned authorities falling under the Federal State do not comply with the recommendations issued by the Bank, they provide the Bank, by means of a reasoned opinion, the reasons leading them to deviate from its recommendations. This reasoned opinion accompanies the communication referred to in Article 36/39.".

Art. 19. In the same Section 4, Article 36/41 is inserted drafted as follows:
"Art. 36/41. If the national authorities falling under the Federal State fail to adopt measures to implement the recommendations issued by the Bank under this Chapter within the possibly fixed deadline or, in the absence of a deadline, within two months of their notification or find themselves in a situation referred to in Article 36/40, the King is empowered, by Royal Decree deliberated in the Council of Ministers, to take itself the measures referred to in Article 36/38, § 1st. In this case, the procedure provided for in Article 36/39 applies.".

Art. 20. In Chapter IV/3, inserted by Article 5, Section 5 entitled "Objectives, special provisions and sanctions" is inserted.

Art. 21. In Section 5, inserted by Article 20, Article 36/42 is inserted drafted as follows:
"Art. 36/42. In the framework of the adoption of acts and measures taken under this Chapter, the Bank and national authorities ensure to contribute to the stability of the financial system as a whole, in particular by strengthening the robustness of the financial system and by preventing the occurrence of systemic risks.".

Art. 22. In the same Section 5, Article 36/43 is inserted drafted as follows:
"Art. 36/43. The Law of 11 April 1994 on the publicity of the administration is not applicable to the Bank in the framework of its mission referred to in this Chapter, nor to national authorities in the framework of the implementation of the Bank's recommendations in accordance with this Chapter.".

Art. 23. In the same Section 5, Article 36/44 is inserted drafted as follows:
"Art. 36/44. The Bank and national authorities as well as the members of their bodies and their respective staff incur no civil liability for their acts or behavior in the framework of the measures and acts adopted under this Chapter, except in cases of fraud or gross negligence.".

Art. 24. In the same Section 5, Article 36/46 is inserted drafted as follows:
"Art. 36/46. The following persons are punishable by a fine of 50 to 10,000 euros:
1° who, being obliged to provide information available or easily accessible under this Chapter or measures taken for its implementation, fails to fulfill the obligations imposed on them; 2° who opposes the searches and inspections conducted by the Bank under Article 36/33; 3° who does not respect the measures imposed under this Chapter. The provisions of Book I of the Penal Code, without exception of Chapter VII and Article 85, apply to offenses punished by this Chapter.".

Parliamentary proceedings

Chamber of Representatives (www.lachambre.be) Documents: 53-3414 Full transcript: 3 April 2014. Senate (www.senate.be) Document: 5-2844 Project not discussed by the Senate: 10 April 2014.

Signatures

Promulgate this Act, order that it be affixed with the State seal and published by the Belgian Monitor.
Given in Brussels, on 25 April 2014.
PHILIPPE
By the King:
The Deputy Prime Minister and Minister of the Interior and of Equal Opportunities, Ms J. MILQUET The Minister of Finances, K. GEENS Sealed with the State seal:
The Minister of Justice,
Ms A. TURTELBOOM