Brussels, 25 September, (Brussels Morning Newspaper) – The National Bank of Belgium (NBB) is maintaining its countercyclical buffer at 1.25%, keeping an additional layer of capital protection for Belgian banks as policymakers monitor rising credit and financial cycles alongside continuing international uncertainty. The most recently published quarterly decision on the NBB’s official register sets the rate at 1.25%.
NBB maintains bank capital protection
The buffer is a temporary additional capital reserve intended to help banks withstand increased credit losses during periods of financial stress. Unlike some other regulatory capital requirements, the NBB can release the reserve when a major shock occurs, giving banks greater capacity to absorb losses and continue lending.
The 1.25% rate became effective on 1 July 2026 following a six-month transition. The NBB had previously operated with a 1% rate.
The change increased the buffer from approximately €2.7 billion to around €3.4 billion, according to the Bank’s June assessment. At the same time, a separate mortgage-related capital buffer of roughly €1.4 billion was abolished. Total macroprudential requirements consequently declined from about €4.1 billion to €3.4 billion.
Credit and financial cycles remain important
The NBB said developments in Belgium’s credit and financial cycles remain central to decisions about the buffer. Both were trending upwards at its latest detailed assessment, which could normally point towards a higher CCyB rate.
However, the Bank cited substantial uncertainty created by international developments as a reason for maintaining a cautious position rather than immediately raising the requirement.
Belgian banks also remain crucial sources of financing for the domestic economy. The NBB reported outstanding lending of €311 billion to Belgian households and €194 billion to non-financial corporations in its June assessment.
NBB cites uncertainty in maintaining rate
Explaining its decision, the National Bank said the conflict in the Middle East was generating a “very high degree of uncertainty”, potentially affecting the future development of the financial cycle.
The Bank also said that, at the time of its assessment, a rate of 1.25% was “sufficient to ensure” the resilience of Belgium’s banking sector when combined with other prudential requirements.
Those assessments underline the balancing act facing regulators: preserving sufficient capital to withstand potential losses without unnecessarily restricting banks’ ability to finance households and companies.
Mortgage risks have declined
The revised framework reflects an improvement in Belgian mortgage portfolios. The NBB said reduced vulnerabilities justified removing the dedicated mortgage buffer and incorporating protection into the broader countercyclical buffer.
The Bank has nevertheless maintained its prudential expectations for new Belgian mortgage lending, including measures intended to limit excessive loan-to-value risks.
NBB will continue quarterly reviews
Belgian law requires the National Bank to reassess the buffer every quarter. Future decisions will continue to consider credit growth, financial-cycle conditions and risks to banking-sector stability.
The NBB can increase the requirement if systemic vulnerabilities build or release capital if a significant economic or financial shock threatens banks’ capacity to support borrowers and the wider Belgian economy.
