1. household access to consumer credit and mortgage loans consumer credit consumer credit market in belgium : diversified and meets households ’ needs, but financially vulnerable borrowers require consideration regulation has impact on access to finance for certain household categories changing environment leads to new challenges in regulation mortgage loans increasing mortgage debt at be and eu level risk pockets : households with high debt ratios or small savings buffers challenge for central bank : combining prudential measures that ensure financial system stability with access to finance for households accis conference hosted by the nbb – 14 june 2022 2. household access to consumer credit and mortgage loans introduction good morning, ladies and gentlemen. good morning, enrique. let me start by saying that it ’ s an honour for the national bank of belgium to host this year ’ s accis conference. and it ’ s with great pleasure that i accepted enrique ’ s invitation to welcome you with a few words. as you know, the nature of our credit register is rather different from most other accis members. belgium has a public register, regulated by specific legislation and managed by the national bank. and while it ’ s not a core business of a central bank, we strongly believe in the advantages of this structure. not only because preventing over - indebtedness is a matter of general interest, but also because credit data are useful in our mission as a prudential supervisor and for different economic studies that we carry out. and the topic of my opening speech, household access to consumer credit and mortgage loans, is a perfect example of this fruitful cooperation between our departments, because it ’ s partially based on data from our credit register. consumer credit 2. 1 consumer credit market in belgium - vulnerabilities now, enrique has only allowed me 10 minutes, so let me begin immediately by presenting you with the most important conclusions of a recent study that we did on the consumer credit market in belgium. to give you an idea of the market size : it totalled 5, 1 million loans representing an outstanding amount of 21 billion euro at the end of 2021, and more than half of the adult population has at least one consumer credit. our study showed that the belgian market for consumer loans is generally mature and diversified. there are several categories of lenders and the credit they offer, meets various household financing needs. the majority of the loans are also provided at interest rates well below the legal maximum. however, we identified two market segments where that ’ s less the case and which thus need specific attention in

order to ensure access to finance. on the supply side, this concerns credit lines and instalment loans granted for an unspecified purpose. for both credit types, there is much less diversity, with interest rates being very uniform across different lenders and close to the permitted maximum. on the demand side, on the other hand, it seems that there is a negative correlation between being financially more vulnerable and having to pay higher interest rates. indeed, we saw that the main feature of households paying higher rates, was that they had less net wealth than other categories. furthermore, a substantial proportion of these high - rate loans are used to repay other consumer credits or to cover current expenditure. in general, consumers contracting this type of credit have significantly lower incomes and net wealth than consumers that borrow for other purposes. 2. 2 regulation & access to the consumer credit market in belgium as elsewhere in europe, national legislation on consumer credit must comply with the consumer credit directive, which aims to ensure transparent and efficient credit markets, while at the same time protecting consumers. it ’ s obvious that changes to the regulations may have an impact on access to the consumer credit market for certain categories of borrowers. this is especially true for those who are financially more vulnerable. accis conference hosted by the nbb – 14 june 2022 3. but we must be careful to ensure that changes do achieve the intended goal, because that is not necessarily the case. let ’ s take for example the maximum interest rate that can be applied according to the type of credit. while a rise in maximum interest rates offers lenders incentives to grant loans to consumers with a higher risk profile, it ’ s clear that this could also overburden borrowers. conversely, a reduction would normally enable households to borrow at more moderate rates. but if the reduction is too large, there is a potential danger that they could be denied access to credit if lenders consider that the lower rates no longer cover the risks. lowering maximum rates could also have a negative impact on the generation of interest income and consequently, on the lender ’ s general profitability. this is especially the case if consumer credit makes up a significant share of his business. a lender might consider that the lower maximum rates are no longer enough to generate an adequate profit margin, which could lead to a market situation where lenders cease to offer certain credit types. so, changing the regulations can be a good thing, but we must be aware of potential risks. that ’ s why it