The National Bank of Belgium (NBB) and the Financial Services and Markets Authority (FSMA) published the fifth update of their report on asset management and non-bank financial intermediation (NBFI), assessing current risks in Belgium as limited. No material risks were identified from the sector's size and nature or Belgian entities' links with foreign NBFI entities. However, incidents abroad highlight vulnerabilities involving liquidity, leverage and interconnectedness within the financial system.
Using the Financial Stability Board's (FSB) narrower measure, which focuses on credit intermediation that may pose financial stability risks through leverage or liquidity transformation, Belgian NBFI assets totaled EUR 172 billion at the end of 2023. This represented 29% of gross domestic product, compared with 98% in other developed economies. These assets were mainly held by investment funds other than equity funds, the vast majority of which are under Belgian supervision. Separately, Belgian investment funds held EUR 215 billion in net assets, while Belgian asset managers had roughly EUR 208 billion under management.
The report emphasizes the importance of following up international recommendations and policy proposals to address vulnerabilities, including work by the FSB and the International Organization of Securities Commissions to strengthen investment funds' liquidity risk management. The development of the European Savings and Investment Union could shift savings from bank accounts into long-term capital market investments, reinforcing the importance of financial stability and consumer protection in the sector.