The majority of banks in Belgium held up well in a recent stress test regarding the guarantee of customer deposits if they went bankrupt. However, six banks failed to provide sufficient information to the Federal Government.
A recent test conducted by the State Guarantee Fund (managed by the Ministry of Finance) assessed whether 29 different banks in Belgium were able to meet legal requirements in the event of a bankruptcy.
All credit institutions which hold deposits in Belgium were tested, including Argenta, Belfius, BNP Paribas Fortis, CBC, Crelan, ING and KBC.
The Guarantee Fund is a safety net which commits to paying up to €100,000 per customer in the case of a bank collapsing, and the fund must issue repayments within seven working days of the bank shutdown.
The Guarantee Fund protects money deposited in current accounts, term accounts, as well as certain bank notes and other bank bonds. It provides guarantees for credit institutions under Belgian law and branches in Belgium that are subject to the law of a third country (outside the EEA) without an equivalent protection system.
In a shutdown scenario, there is a legal deadline of three days for banks to provide customer information to the Guarantee Fund, so that the fund can pay out to customers in a timely manner.
Six banks did not provide sufficient information
Of the 29 banks tested, six did not provide sufficient information to have their customers repaid by the Guarantee Fund. Among the 23 which did, only ten succeeded in providing the data within the statutory three-day period.
The Ministry of Finance did highlight that the six banks which failed to provide sufficient information are smaller institutions, as they account for only 0.05% of all deposits in Belgium. The banks in question were not named.
"The tests showed significant progress among credit institutions. Banks are able to provide the necessary information to the Guarantee Fund to repay savers. However, improvements are still needed in the speed of data transmission, which still takes more than three working days for the majority of institutions," the Ministry said.
The Ministry added that the Guarantee Fund is committed to working closely with credit institutions to "strengthen their responsiveness and ensure the protection of savers, thereby ensuring confidence and stability in the financial system."
