Royal Decree of 29 January 2020 approving the National Bank of Belgium Regulation of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium

FEDERAL PUBLIC SERVICE FINANCES

[C − 2020/20215]

29 JANUARY 2020. — Royal Decree approving the regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium

PHILIP, King of the Belgians,

To all who are now and hereafter shall be, Greetings.

Having regard to the Law of 22 February 1998 establishing the organic statute of the National Bank of Belgium, Article 12bis, § 2;

Having regard to the Law of 25 April 2014 on the status and supervision of credit institutions and stockbroking companies, Article 97;

Having regard to the opinion of the Financial Inspection, given on 14 January 2020;

Having regard to the agreement of the Minister of the Budget, given on 17 January 2020;

Having regard to Article 8 of the Law of 15 December 2013 on various provisions regarding administrative simplification, this decree is exempt from a regulatory impact analysis because it concerns self-regulatory provisions;

On the proposal of the Minister of Finance and on the advice of the Ministers meeting in Council,

We have decided and do decide:

Article 1. The regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium, attached to this decree, is approved.

FEDERAL PUBLIC SERVICE FINANCES

[C − 2020/20215]

29 JANUARY 2020. — Royal Decree approving the regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium

PHILIPPE, King of the Belgians,

To all, present and future, Greetings.

Having regard to the Law of 22 February 1998 establishing the organic statute of the National Bank of Belgium, Article 12bis, § 2;

Having regard to the Law of 25 April 2014 on the status and supervision of credit institutions and stockbroking companies, Article 97;

Having regard to the opinion of the Financial Inspection, given on 14 January 2020;

Having regard to the agreement of the Minister of the Budget, given on 17 January 2020;

Having regard to Article 8 of the Law of 15 December 2013 on various provisions regarding administrative simplification, this decree is exempt from a regulatory impact analysis, as it concerns self-regulatory provisions;

On the proposal of the Minister of Finance and on the advice of the Ministers who have deliberated in Council,

We have decided and do decide:

Article 1. The regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium, annexed to this decree, is approved.

BELGIAN STATE GAZETTE — 14.02.2020 − Ed. 2 — MONITEUR BELGE 9039

Art. 2. The Minister responsible for Finance is charged with the implementation of this decree.

Given at Brussels, 29 January 2020.

PHILIP

By the King:

The Minister of Finance,

A. DE CROO

Annex to the Royal Decree of 29 January 2020 approving the regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium

The National Bank of Belgium,

Having regard to the Law of 25 April 2014 on the status and supervision of credit institutions and stockbroking companies, Article 97;

Having regard to the Law of 22 February 1998 establishing the organic statute of the National Bank of Belgium, Article 12bis, § 2;

Having regard to Article 458 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012;

Whereas Article 458 of Regulation (EU) No 575/2013 enables competent authorities to impose stricter measures to take into account a change in the intensity of macroprudential risk and more specifically to address additional risks in the residential real estate sector;

Whereas the additional risk weight for exposures secured by residential real estate in Belgium, as determined in the regulation of the National Bank of Belgium of 27 February 2018 on additional own funds requirements for specific systemic risk, remains justified, given the volume of these exposures and the persistent vulnerabilities, namely 1° the strong growth of real estate-backed loans and the resulting increase in the debt burden of Belgian households; 2° the still significant share in the aforementioned loans of subsegments considered riskier; and 3° the dynamics in the evolution of house prices in Belgium,

DECIDES:

Article 1 - Scope of Application

§ 1. For the purposes of this decree, the following terms are understood as:

1° "Regulation (EU) No 575/2013": Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012;

2° "the Law of 25 April 2014": the Law of 25 April 2014 on the status and supervision of credit institutions and stockbroking companies.

§ 2. The provisions of this regulation apply to the credit institutions referred to in Book II and Book III, Title II of the Law of 25 April 2014.

Art. 2 - Macroprudential Measure

For real estate-backed exposures to retail clients, the risk weight for exposures calculated in accordance with Article 154 of Regulation (EU) No 575/2013 is increased by an amount equal to the sum of the following elements:

1° 5 percent of the real estate-backed exposures to individuals; and

2° 33 percent of the risk weight for all exposures to individuals calculated in accordance with Article 154 of Regulation (EU) No 575/2013.

Art. 2. The Minister who has Finance in his attributions is charged with the execution of this decree.

Given at Brussels, on 29 January 2020.

PHILIPPE

By the King:

The Minister of Finance,

A. DE CROO

Annex to the Royal Decree of 29 January 2020 approving the regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium

The National Bank of Belgium,

Having regard to the Law of 25 April 2014 on the status and supervision of credit institutions and stockbroking companies, Article 97;

Having regard to the Law of 22 February 1998 establishing the organic statute of the National Bank of Belgium, Article 12bis, § 2;

Having regard to Article 458 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements applicable to credit institutions and investment firms and amending Regulation (EU) No 648/2012;

Considering that Article 458 of Regulation (EU) No 575/2013 allows competent authorities to impose stricter measures to take into account a variation in the intensity of macroprudential risk and more particularly to address complementary risks in the residential real estate sector;

Considering that the additional risk weighting applicable to exposures secured by a residential real estate property located in Belgium, as provided for by the regulation of the National Bank of Belgium of 27 February 2018 on additional own funds requirements for specific systemic risks, remains justified in view of the extent of these exposures and in view of the persistence of observed vulnerabilities, notably 1° the significant growth of real estate-backed loans and the increase in the indebtedness of Belgian households resulting from it; 2° the still important share among the aforementioned loans of sub-segments considered to be riskier; and 3° the dynamics observed in the evolution of residential real estate prices in Belgium,

DECIDES:

Article 1 - Scope of Application

§ 1. For the purposes of this decree, the following terms are understood as:

1° "Regulation (EU) No 575/2013", Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements applicable to credit institutions and investment firms and amending Regulation (EU) No 648/2012;

2° "the Law of 25 April 2014", the Law of 25 April 2014 on the status and supervision of credit institutions and stockbroking companies.

§ 2. The provisions of this regulation apply to credit institutions referred to in Book II and Book III, Title II, of the Law of 25 April 2014.

Art. 2 - Macroprudential Measure

Regarding exposures to retail clients secured by real estate, the risk-weighted amount of exposures calculated in accordance with Article 154 of Regulation (EU) No 575/2013 is increased by an amount consisting of the sum of the following elements:

1° 5 percent of the amount of exposures to retail clients secured by real estate; and

2° 33 percent of the risk-weighted amount of all exposures to retail clients, calculated in accordance with Article 154 of Regulation (EU) No 575/2013.

9040 BELGIAN STATE GAZETTE — 14.02.2020 − Ed. 2 — MONITEUR BELGE

Art. 3 – Entry into Force

“This regulation enters into force on 1 May 2020, provided that the Council of the European Union does not reject the measure referred to in Article 2 of this regulation, which must be notified by 30 January 2020 in accordance with Article 458, paragraph 2, of Regulation (EU) No 575/2013, in accordance with Article 458, paragraph 4, of this regulation.”.

This regulation ceases to be in force on 30 April 2021.

Brussels, 2 December 2019.

The Governor,

Seen to be attached to Our decree of 29 January 2020 approving the regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium.

PHILIP

By the King:

The Minister of Finance,

A. DE CROO

*

Art. 3 – Entry into Force

« This regulation enters into force on 1 May 2020, on condition that the Council of the European Union has not rejected, in application of Article 458, § 4 of Regulation (EU) No 575/2013, the measure referred to in Article 2 of this regulation, as notified by 30 January 2020 at the latest, in application of Article 458, § 2 of Regulation (EU) No 575/2013. ».

This regulation ceases to have effect on 30 April 2021.

Brussels, 2 December 2019.

The Governor

Seen to be annexed to Our decree of 29 January 2020 approving the regulation of the National Bank of Belgium of 2 December 2019 on additional own funds requirements for macroprudential risk related to exposures secured by residential real estate in Belgium.

PHILIPPE

By the King:

The Minister of Finance,

A. DE CROO

BELGIAN STATE GAZETTE — 14.02.2020 − Ed. 2 — MONITEUR BELGE 9041