A leading economic expert has condemned Belgian banks' "excessive profits" and accused the National Bank of Belgium (NBB) of abdicating its responsibility for regulating the country's financial sector.
Writing in L'Echo, entrepreneur and former Walloon Government adviser Baudouin Dubuisson also suggested that banks have enjoyed "oligopolistic" control over Belgian society ever since the 2008 financial crisis – and that the NBB's policies are "constantly strengthening" this privileged position.
"How much longer will we accept that a protected sector will show a clearly higher profitability than that of the economy it is supposed to serve?" Dubuisson asked.
He added: "It is obviously very comfortable for the NBB to allow bankers to achieve good profitability and then claim that it has fulfilled its mission of guaranteeing stability... The NBB must monitor rather than hide behind [banks'] outsized profitability."
'The profits are privatised'
Dubuisson's denunciation is just the latest of several aimed at Belgium's financial institutions over the past few months. Critics primarily accuse banks of failing to hike customers' savings rates to sufficient levels despite repeated interest rate hikes by the European Central Bank (ECB).
Furthermore, they argue that the margin between these two rates (i.e. the interest rates provided to commercial banks by the ECB and the rates offered to savers by commercial banks) largely explains the strong performance of the country's banks over much of the past year: BNP Paribas Fortis – Belgium's largest bank – posted a profit of €3.16 billion in 2022, up almost a fifth (18.8%) from 2021.
In his article, Dubuisson drew attention to the fact that many Belgian bank shares are actually foreign-owned: meaning that excessive financial profitability effectively translates to money being sucked out of the Belgian economy.
"The shareholders of the banks are mainly foreign," he wrote. "Once again, the profits are privatised while everyone remembers the losses that are borne by the community."
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Dubuisson, however, stopped short of demanding that the Federal Government legally require banks to increase their savings rates. Instead, he argued that, unless "healthy competition" between banks is guaranteed, their "excessive profits" should be taxed.
Breaking with deeply entrenched economic orthodoxy, Dubuisson also suggested that the NBB's independence should be curbed.
"Only one conclusion is necessary: the independence of central banks leads us to a dead end with ever fewer banks, ever less competition, good remuneration and ever more profitability on one side," he said. "Today, the [economic] balance is broken."
