National Bank of Belgium and Belgium Financial Services and Markets Authority update joint report finding limited risks in Belgian asset management and NBFI

The National Bank of Belgium and the Belgium Financial Services and Markets Authority published the fifth update of their joint report on asset management and non-bank financial intermediation (NBFI) in Belgium, concluding that associated risks are currently limited. The update nonetheless points to vulnerabilities seen abroad and frames continued monitoring as important given ongoing international policy work and the expected growth of market-based finance under the European Savings and Investment Union. Using a risk-based approach, the report narrows NBFI to credit intermediation activities that could create bank-like financial stability risks through leverage or liquidity transformation, and estimates this subset at EUR 172 billion in assets at end-2023 using the Financial Stability Board methodology. It also highlights the scale of Belgian asset management at end-2023, with Belgian investment funds holding EUR 215 billion in net assets and Belgian asset managers managing around EUR 208 billion in assets under management. Compared with other developed economies, the Belgian NBFI segment is described as small, accounting for less than 0.5% of the global aggregate and around 1% of the EU total, with EUR 172 billion corresponding to 29% of GDP, and the assets mainly held in supervised non-equity investment funds. The authorities underline the importance of European and international regulatory initiatives to address risks linked to liquidity, leverage and interconnectedness, and state they will continue participating in international work and maintaining regular updates as part of ongoing supervision.