Alternatives to borrower-based measures in mitigating

risks from real estate markets: the Belgian experience

Thomas Schepens

Vilnius, 12 May 2017

Presentation 2

Structure of the presentation

► Developments in the Belgian mortgage market

● Financial Stability Report 2016, Thematic article

► Macroprudential measure for IRB banks

● 5% risk weight add-on (since 2013)

● proposed new measure (two components)

5% risk weight add-on

additional macroprudential capital buffer for loans with

indexed LTV > 80 % (size of buffer calculated on basis

van LGD floors of resp. 20 % and 30 % for loans with

ILTV > 80 % and ILTV > 90 %)

Presentation 3

Developments in the Belgian mortgage market

Presentation 4

Developments in the Belgian mortgage market

Presentation 5

Developments in the Belgian mortgage market

Presentation 6

Developments in the Belgian mortgage market

Presentation 7

Developments in the Belgian mortgage market

Presentation 8

Developments in the Belgian mortgage market

Presentation 9

Developments in the Belgian mortgage market

Presentation 10

Developments in the Belgian mortgage market

Presentation 11

Developments in the Belgian mortgage market

Presentation 12

Developments in the Belgian mortgage market

Presentation 13

Macroprudential measure for IRB banks

► 5% risk weight add-on for IRB banks (since 2013)

● = similar to sectoral CCyB

► proposed new measure for IRB banks (2 components)

● 5% risk weight add-on

● additional macroprudential capital buffer for loans with

indexed LTV > 80 %

size of buffer calculated on basis van LGD floors of

20 % for loans with ILTV > 80 %

30 % for loans with ILTV > 90 %