Belgian Banking Sector Undergoes Major Overhaul with Introduction of New Oath for Directors and Employees

Strengthening Trust and Integrity in the Belgian Banking Sector

In a significant move aimed at bolstering trust and integrity, a new oath has been introduced for directors, managers, and employees directly involved in providing banking services in Belgium. By taking the oath, these individuals pledge to act with honesty, integrity, competence, and professionalism in all circumstances, prioritizing their clients’ best interests and treating them fairly.

New Oath: A Pledge to Excellence

The new oath is part of a broader effort to strengthen the sector’s regulatory framework, which includes the suitability requirements set out in the Banking Act. The act aims to integrate the three pillars of the EU Banking Union into Belgian law:

Single Supervisory Mechanism: ensures that banks are adequately supervised and regulated.
Single Resolution Mechanism: provides for the resolution of failed banks without putting taxpayers at risk.
Common Deposit Guarantee Schemes: guarantees deposits up to a certain amount in case of bank failure.

Achieving Compliance with EU Directives

To achieve this goal, the Banking Act transposes various EU directives and regulations, including:

Capital Requirements Directive: sets minimum capital requirements for banks.
Financial Conglomerates Directive: regulates financial conglomerates and their subsidiaries.
Bank Recovery and Resolution Directive: provides a framework for resolving failed banks without systemic risk.
Deposit Guarantee Schemes Directive: ensures that depositors’ funds are protected in case of bank failure.
MiFID II: sets standards for investment services, including transparency and fairness.

Other Developments in Belgian Banking Regulation

In addition to the introduction of the new oath, other significant developments in Belgian banking regulation in 2023 included:

Communications and Circulars from the National Bank of Belgium (NBB): addressed topics such as diversity and gender pay gap.
On-site Inspections: conducted by the NBB as part of its prudential supervisory duties.
Establishment of Representative Offices: foreign credit institutions set up representative offices in Belgium.

Conclusion

These developments underscore the importance of a robust regulatory framework in ensuring the stability and integrity of the Belgian banking sector. As the industry continues to evolve, it is crucial that stakeholders remain vigilant and adapt to changing requirements to maintain public trust and confidence.