Belgian banks must clean up mortgage books or face higher capital bar, supervisor warns

19 February 2019 11:15am
Belgian banks could end up having to hold extra capital against shocks due to a stack of poor-quality home loans, the governor of Belgium’s central bank warned today.

The pile-them-high, sell-it-cheap model adopted by some lenders resembled the situation before Dexia Group's collapse after the 2008 financial crisis, Pierre Wunsch told a financial sector audience in Brussels.

Wunsch’s remarks suggest that tougher requirements on lenders to hold extra assets, imposed last year by the National Bank of Belgium, haven't gone far enough in halting a potentially dangerous credit bubble.