the belgian mortgage market : recent developments and ...ce2cb93a-f2b9-49e1-a56c-d3a7f6c1112… ·...

1

The Belgian mortgage market : recent developments and prudential measures

Thomas Schepens

Vienna, 9-10 October 2014

Presentation2 / 19

Overview presentation

► Presentation is based on two articles that appeared in the NBB

Financial Stability Review 2014

● The Belgian mortgage market : recent developments and prudential

measures

● Evaluating early warning indicators for real estate related risks

(Authors : Stijn Ferrari and Mara Pirovano)

► Outline of the presentation

1. Recent developments in the Belgian housing and mortgage market

2. Description of the three prudential measures taken end 2013

3. Overview of recent work on early warning indicators

2

Presentation3 / 19

1 & 2. Recent developments and prudential measures

Presentation4 / 19

1. Developments in the housing and mortgage market

3

Presentation5 / 19

1. Developments in the housing and mortgage market

Presentation6 / 19

1. Developments in the housing and mortgage market

4

Presentation7 / 19

1. Developments in the housing and mortgage market

Presentation8 / 19

1. Developments in the housing and mortgage market

5

Presentation9 / 19

1. Developments in the housing and mortgage market

Presentation10 / 19

1. Developments in the housing and mortgage market

6

Presentation11 / 19

1. Developments in the housing and mortgage market

Presentation12 / 19

1. Developments in the housing and mortgage market

7

Presentation13 / 19

2. Prudential measures taken in Q4 2013

► Add-on of 5 percentage points to banks’ own IRB risk weights for

Belgian mortgage loans (in Pillar I : change in Belgian Own Funds

Regulation for Q4 2013; Art 458 CRR since Q1 2014)

● The weighted average IRB banks’ risk weight for mortgage

loans increased from 10 % to 15 % as from Q4 2013

(corresponds to + € 600 mln additional capital requirement)

► Horizontal review of banks’ IRB models for Belgian mortgage

loans, on the basis of backtest reports (2014)

► Banks asked to self-assess and report on compliance with EBA

Opinion on Good Practices for Mortgage Lending and EBA

Opinion on Good Practices for the Treatment of Borrowers in

Mortgage Payment Difficulties (2014)

Presentation14 / 19

2. Prudential measures taken in Q4 2013

NPL % for Belgian mortgage loans (1) Vintage view, without correction for regularisations after a default

Source : NBB – Central credit register for loans to households(1) Ratio between number of loans registered as in default

(incl. those already regularised) and total number of mortgage loans outstanding

8

Presentation15 / 19

3. Recent work on early warning indicators

Presentation16 / 19

3. Recent work on early warning indicators

9

Presentation17 / 19

3. Recent work on early warning indicators

Presentation18 / 19

3. Recent work on early warning indicators

10

Presentation19 / 19

Thank you for your attention