Word from Koen Geens, Minister of Finance

For many European citizens, the economic crisis is still a daily reality. We, as policy-makers, cannot lose sight of this fact. Turning the page will take more time, and require further structural reforms. Over the past few years, we have laid the foundation for a sustainable economic recovery. The strengthened economic supervision of the EU is already tangible in practice, and with the agreement on a single supervisory mechanism banking union is closer than ever before. In addition, the euro is out of the danger zone and the financial markets have once again quieted down.

This financial stability is a conditio sine qua non for economic recovery. Moreover, this financial stability has come about through in-depth reforms of both the financial supervisory architecture and the sector itself. I am very much aware that many of these reforms are not easy. I understand all too well that there are still many important reforms waiting in the wings, but I also know that these reforms are essential. The first signs of recovery encourage us to continue, and we cannot make the historic mistake of not learning the lessons from the crisis that now lies behind us.

As far as I am concerned, new financial regulations must satisfy the following requirements: Firstly, we must not lose the political momentum behind banking union. The European agreement reached in December of last year on a single supervisory mechanism steered by Frankfurt is a crucial first step. Good supervision is after all the best way to avoid a bank getting into trouble. However, we must go further. A single supervisory mechanism must be complemented with a single resolution and deposit-guarantee mechanism. A legally certain and predictable way to wind up distressed banks, whereby tax payers and savers are protected, is the best manner in which to avoid moral hazards and achieve financial stability.

Secondly, banks must be able to continue to perform their traditional, intermediation function to the fullest. Without overestimating the power of regulation, the government must provide impetus. Belgian savings must continue to find their way to the real economy, and a healthy mix of financing and good access to financing for SMEs is crucial in this regard.

The third challenge is probably the most important: restoring trust. Credit is actually about trust, after all. Creating strong trust in the financial sector is achieved through stronger capital buffers and increased supervision. However, in order to sustainably win back citizens’ trust the sector must also keep a keen eye on society. Hence the not to be underestimated importance of this strategic agenda exercise. I am pleased that this exercise contains a number of concrete commitments for creating a sustainable and vigorous financial sector.

A sustainable financial sector must of course also be vigorous. In order to support our fabric of export-oriented companies in Belgium, our banks must be strong and stable. Tens of thousands of people in Belgium work in the financial sector, and this is something we must cherish. Every time we learn a lesson for tomorrow from yesterday’s crisis, we must strike a good balance between what is desired and what is feasible. In the end, we will all come out stronger.

I wish you all pleasant reading.


Koen Geens
Minister of Finance, responsible for Civil Service matters