In the wake of the financial crisis, a process has been under way, at both national and international levels, to rethink the shape of the supervisory architecture for the financial sector. In various countries of the European Union in particular, there was a rapidly growing convergence on the need for a rapprochement between the micro- and the macro-prudential components of the supervision of financial institutions.

Parallel to these European developments, in Belgium too the main lines were drawn for a new organisation of supervision. IOPS wishes hereby to inform you of recent developments in this regard.

1. Introduction of the Twin Peaks model

In line with international developments, and building on the recommendations formulated by a national working group, the Belgian government opted, in the Law of 2 July 2010, to develop the supervision of the financial sector towards a bipartite model known as the "Twin Peaks" model. This bipartite model is intended to provide a structure for the two major objectives of the supervision of the financial sector:
 

- maintaining the macro- and microeconomic stability of the financial system which falls within the competence of the central bank, that is, the National Bank of Belgium (hereafter "the National Bank");

- ensuring that market processes are equitable and transparent, that relationships between market participants are appropriate and that clients are treated honestly, fairly and professionally (notably from the perspective of rules of conduct), tasks which fall henceforth within the competence of the Financial Services and Markets Authority (FSMA), formerly the CBFA.

The National Bank is a member of the following European supervisory authorities: the EBA and EIOPA.

2. The institutions concerned

The Twin Peaks model consists on the one hand of a separation between the supervision of compliance with prudential rules and of compliance with rules of conduct. On the other hand, it is marked by the full integration of micro- and macro-prudential supervision. Thus, the National Bank, which already monitored macroeconomic developments, will henceforth also be responsible for the individual prudential supervision of the following institutions within the financial system:

• credit institutions, including financial services groups;

• investment firms that have the status of a stockbroking firm;

• insurance companies;

• reinsurance companies;

• clearing institutions;

• settlement institutions and equivalent institutions;

• payment institutions;

• electronic money institutions;

• surety companies.

Press release