Belgium
Belgium has no national measures recorded yet: its index of 44.0 comes from 11 EU-wide and euro-area rules in force and euro-area market data (real policy rate −1.0%, Aug 2026).
EU-wide EU rules give sovereign debt preferential treatment in bank and insurance regulation (zero risk weights, large-exposure exemptions, Level 1 liquidity status, no Solvency II spread charge), and the ECB backstops spreads through the TPI while its APP and PEPP portfolios run off. Member states add their own measures, such as Italy's tax privileges for BTPs, France's administered Livret A rate and share-trading taxes, and rent caps in Germany, Spain and France. EU-level proposals on a digital euro holding limit and savings accounts are still pending.
- 11 in force
- 2 enacted
- 3 proposed or under discussion
Measures as of
How the index is built
Each segment is what one category of rules, or the market pillar, adds to the index. The full bar is 100.
- Captive demand 6.4
- Central bank financing 9.6
- Capital controls 11.6
- Rate caps 0.0
- Prudential sovereign bias 7.8
- Directed credit 0.0
- Tax incentives 0.0
- Real asset restrictions 0.0
- Transaction taxes 0.0
- Market pillar 8.6
Index = 80% × rules (44.3) + 20% × market (42.9) = 44.0
The method in plain words
- Rules pillar (0–100). Each of the 9 categories can add up to its weight (the weights sum to 100). A category's intensity grows with every in-force measure in it: one measure counts by its severity factor (0.25 for severity 1, 0.5 for 2, 0.8 for 3), and each further measure closes part of the remaining gap, so breadth adds with diminishing returns: two severity-3 measures give 96%.
- Market pillar (0–100). The average of the market readings below: how negative the real policy rate is, and how much of the government's debt is held by its own central bank and banks.
- Index. 80% rules + 20% market when market data exists, otherwise rules alone. Laws passed but not yet applying count only in the outlook; proposals never count.
The 9 categories
Weight = the most points a category can add to the rules pillar. Intensity = how much of that weight the in-force measures fill. Open a category to see the measures counted; “What is this?” shows the instruments behind it, worldwide and in history.
- Weight 16Intensity 50%Points 6.4
Mandated holdings of government debt by pension funds, insurers or banks. What is this? →
Captive demand: measures counted in the index Measure counted Severity Factor Points (EU) 2 of 3 0.5 6.4 - Weight 16Intensity 75%Points 9.6
Central bank purchases of government debt, yield curve control, direct monetary financing. What is this? →
Central bank financing: measures counted in the index Measure counted Severity Factor Points (EU) 2 of 3 0.5 4.8 (EU) 2 of 3 0.5 4.8 - Weight 16Intensity 91%Points 11.6
Limits on moving money abroad, outbound investment limits, FX controls. What is this? →
Capital controls: measures counted in the index Measure counted Severity Factor Points (EU) 2 of 3 0.5 3.4 (EU) 2 of 3 0.5 3.4 (EU) 2 of 3 0.5 3.4 (EU) 1 of 3 0.25 1.4 - Rate capsWeight 14Intensity 0%Points 0.0
Caps or ceilings on deposit or lending rates, and administered interest rates. No in-force measures here. What is this? →
- Weight 10Intensity 98%Points 7.8
Prudential rules that favor sovereign debt (zero risk weights, liquidity-buffer rules, leverage-ratio exemptions). What is this? →
Prudential sovereign bias: measures counted in the index Measure counted Severity Factor Points (EU) 3 of 3 0.8 3.4 (EU) 2 of 3 0.5 1.5 (EU) 2 of 3 0.5 1.5 (EU) 2 of 3 0.5 1.5 - Directed credit1 proposed not countedWeight 10Intensity 0%Points 0.0
State-directed lending, credit guidance, and mandates to invest domestically or in state priorities. No in-force measures here. What is this? →
- Tax incentivesWeight 7Intensity 0%Points 0.0
Tax privileges for government bonds, or tax penalties on competing assets. No in-force measures here. What is this? →
- Real asset restrictions2 enacted, 1 proposed not countedWeight 6Intensity 0%Points 0.0 → 3.0 once enacted laws apply
Rent controls, property curbs, and limits on owning gold, cash or crypto. No in-force measures here. What is this? →
- Transaction taxes1 proposed not countedWeight 5Intensity 0%Points 0.0
Financial transaction taxes, stamp duties and similar levies on non-government assets. No in-force measures here. What is this? →
Market pillar 42.9 / 100
The average of the readings that have data, worth 20% of the index (8.6 points here).
Real policy rate
42.9 / 100-1.0% · Aug 2026
Policy rate minus inflation. A real rate of +2% or more scores 0; −5% or less scores 100; in between it scales in a straight line. Savers lose most when it is deeply negative.
Euro-area data. Policy rate 2.25% minus consumer price inflation 3.249% (year on year), 2026-08.
Debt held by the central bank and domestic banks
no dataShare of government debt held by the domestic central bank and domestic banks. 0% scores 0; 60% or more scores 100; in between it scales in a straight line.
No country figure: the IMF investor base has no euro-area aggregate and the euro-area series is not used for this component.
Indicators
Euro-area figures. Measured data from international sources, alongside the rules above. Real rates below zero mean savers lose purchasing power.
Policy rate, inflation and real rate
The liquidation effect follows Reinhart and Sbrancia: with a negative real rate, about −(real rate × debt) of GDP moves from savers to the state each year. It uses the policy rate, so treat it as a rough guide. Sources: BIS, BIS central bank policy rates; BIS consumer prices; IMF, IMF DataMapper: World Economic Outlook (October 2026); Fiscal Monitor (October 2026).
Measures
Every measure tracked here, with its legal basis and sources. Only in-force measures count in the index.
In force (11)
DAC8: automatic reporting of residents' crypto transactions to tax authorities
Adds 3.4 points to the index
Directive (EU) 2023/2226 (DAC8) requires crypto-asset service providers to collect and report users' transactions, such as aggregate amounts paid for acquisitions against fiat, to tax authorities, which exchange the data across member states. Member states apply the rules from 1 January 2026, with the first information covering 2026.
Why it counts: Removes crypto as a tax-opaque alternative to domestic savings: every holder using an EU or reporting provider becomes visible to the tax authority, raising effective taxation and deterring use.
Legal basis Council Directive (EU) 2023/2226 amending Directive 2011/16/EU (DAC8), Article 1(6) inserting Article 8ad(1) into Directive 2011/16/EU and 1 more
Council Directive (EU) 2023/2226 amending Directive 2011/16/EU (DAC8), Article 1(6) inserting Article 8ad(1) into Directive 2011/16/EUPrimary source
“Each Member State shall take the necessary measures to require Reporting Crypto-Asset Service Providers to fulfil the reporting requirements and carry out the due diligence procedures laid down in Sections II and III of Annex VI”
Council Directive (EU) 2023/2226 amending Directive 2011/16/EU (DAC8), Article 8ad(6) of Directive 2011/16/EU as insertedPrimary source
“The first information shall be communicated for the relevant calendar year or other appropriate reporting period as from 1 January 2026.”
MiCA: authorisation required to serve EU residents; reverse-solicitation only
Adds 3.4 points to the index
Only crypto-asset service providers authorised under MiCA (or banks and other licensed financial firms) may provide crypto-asset services in the EU. Third-country platforms may serve EU clients only at the client's own exclusive initiative and may not solicit them; national transitional regimes ended at the latest on 1 July 2026.
Why it counts: Bars EU residents from being actively served by unlicensed foreign exchanges, channelling crypto activity through supervised EU entities that apply reporting and AML rules.
Legal basis Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 59(1) and 2 more
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 59(1)Primary source
“A person shall not provide crypto-asset services, within the Union, unless that person is:”
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 61(1)Primary source
“solicits clients or prospective clients in the Union, regardless of the means of communication used for the solicitation, promotion or advertising in the Union, it shall not be deemed to be a service provided on the client’s own exclusive initiative”
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 143(3)Primary source
“may continue to do so until 1 July 2026 or until they are granted or refused an authorisation pursuant to Article 63, whichever is sooner.”
Checks on transfers to self-hosted crypto wallets (since Dec 2024)
Adds 3.4 points to the index
Since 30 December 2024 the recast transfer-of-funds regulation (EU) 2023/1113 requires crypto-asset service providers to obtain and hold originator and beneficiary information on transfers, including transfers to self-hosted addresses, and, for transfers above EUR 1,000 to a self-hosted address, to take adequate measures to assess whether the address is owned or controlled by their client.
Why it counts: Makes crypto transfers through regulated providers traceable, including exits to self-custody; self-custody remains legal but transfers to it above EUR 1,000 face ownership checks.
Legal basis Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets, Article 14(5)
Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets, Article 14(5)Primary source
“in the case of a transfer of an amount exceeding EUR 1 000 to a self-hosted address, the crypto-asset service provider of the originator shall take adequate measures to assess whether that address is owned or controlled by the originator.”
MiCA: e-money tokens only from banks/e-money institutions, reserves in bank deposits and liquid assets
Adds 6.4 points to the index
Under MiCA, an e-money token (fiat stablecoin) may be offered to the public in the EU only if its issuer is authorised as a credit institution or an electronic money institution. Issuers must keep at least 30% of the funds received deposited in separate accounts at credit institutions and invest the rest in secure, low-risk, highly liquid financial instruments denominated in the same currency. For significant asset-referenced tokens MiCA requires EBA liquidity standards to set a minimum deposit share of at least 60%, and e-money institutions issuing significant e-money tokens are subject to the same Art. 45(1)-(4) liquidity rules (Art. 58(1)). The stablecoin titles (III and IV) apply from 30 June 2024.
Why it counts: Stablecoin reserves are funnelled into bank deposits and high-quality liquid instruments (in practice largely government debt), so stablecoin demand recycles into the banking system and sovereign bonds; issuance is reserved to regulated banks and e-money institutions.
Legal basis Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 48(1)(a) and 3 more
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 48(1)(a)Primary source
“A person shall not make an offer to the public or seek the admission to trading of an e-money token, within the Union, unless that person is the issuer of such e-money token”
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 54(a)-(b)Primary source
“at least 30 % of the funds received is always deposited in separate accounts in credit institutions;”
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 45(7)(b)Primary source
“specifying the minimum amount of deposits in each official currency referenced, which cannot be lower than 60 % of the amount referenced in each official currency”
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 149(3)Primary source
“By way of derogation from paragraph 2, Titles III and IV shall apply from 30 June 2024.”
MiCA: cap on non-EU-currency stablecoins used as a means of exchange
Adds 1.4 points to the index
If an asset-referenced token, or an e-money token denominated in a currency that is not an official currency of a Member State (e.g. a US-dollar stablecoin), is used as a means of exchange within a single currency area for an estimated quarterly average of more than 1 million transactions and EUR 200 million a day, the issuer must stop issuing it and, within 40 working days, submit a plan to bring use back below those thresholds. Applies with MiCA's stablecoin titles from 30 June 2024.
Why it counts: Caps the use of foreign-currency stablecoins for payments inside the euro area, protecting the euro and bank deposits against dollar-stablecoin substitution.
Legal basis Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 23(1) and 1 more
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 23(1)Primary source
“associated to its uses as a means of exchange within a single currency area is higher than 1 million transactions and EUR 200 000 000, respectively, the issuer shall:”
Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), Article 58(3)Primary source
“Articles 22, 23 and 24(3) shall apply to e-money tokens denominated in a currency that is not an official currency of a Member State.”
ECB Transmission Protection Instrument
Adds 4.8 points to the index
The TPI lets the ECB buy, without a preset limit, the bonds of a euro-area government whose borrowing costs rise in ways not justified by fundamentals, subject to criteria on sound fiscal policy. It has not been activated.
Why it counts: An open-ended backstop caps sovereign spreads, which reduces the yield investors can demand from weaker governments.
Legal basis ECB press release: The Transmission Protection Instrument and 1 more
ECB press release: The Transmission Protection InstrumentPrimary source
“The scale of TPI purchases would depend on the severity of the risks facing monetary policy transmission. Purchases are not restricted ex ante.”
Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank, Article 18.1Primary source
“operate in the financial markets by buying and selling outright (spot and forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments,”
Solvency II: no spread or concentration charge on EEA government bonds
Adds 1.5 points to the index
In the Solvency II standard formula, EEA government bonds denominated and funded in domestic currency carry no capital charge for spread or concentration risk. The amending Directive (EU) 2025/2, published in January 2025 and applying from early 2027, reviews the regime.
Why it counts: Insurers need no capital for credit risk on EU government bonds, which makes them cheaper to hold than corporate bonds or loans.
Legal basis Commission Delegated Regulation (EU) 2015/35 supplementing Directive 2009/138/EC (Solvency II), Article 180(2)(b) (spread risk) and 2 more
Commission Delegated Regulation (EU) 2015/35 supplementing Directive 2009/138/EC (Solvency II), Article 180(2)(b) (spread risk)Primary source
“Exposures in the form of bonds and loans to the following shall be assigned a risk factor stressi of 0 %:”
Commission Delegated Regulation (EU) 2015/35 (Solvency II), Article 187(3)(b) (market risk concentration)Primary source
“Member States' central government and central banks denominated and funded in the domestic currency of that central government and central bank;”
Directive (EU) 2025/2 amending Directive 2009/138/EC, Article 4(1)Primary source
“Member States shall adopt and publish, by 29 January 2027, the laws, regulations and administrative provisions necessary to comply with this Directive.”
Sources
- EIOPA Q&A 1494 - 0% spread risk factor for EEA central government bonds (Art. 180(2)(b))
- Delegated Regulation (EU) 2015/35, Article 187 - market risk concentration (as adopted)
- Insurance Asset Risk - Risk-weighting sovereign bonds would add EUR 80bn to insurers' capital
- Deloitte - Solvency II review 2025
EU sovereign bonds as Level 1 liquid assets
Adds 1.5 points to the index
Delegated Regulation (EU) 2015/61 lets banks count assets issued or guaranteed by any member state's central government as Level 1 liquid assets without the credit-quality conditions applied to third-country governments.
Why it counts: Every EU government bond qualifies for the top liquidity tier whatever its rating, so liquidity rules create steady bank demand for sovereign debt.
Legal basis Commission Delegated Regulation (EU) 2015/61 supplementing Regulation (EU) No 575/2013 with regard to liquidity coverage requirement, Article 10(1)(c)(i)-(ii)
Commission Delegated Regulation (EU) 2015/61 supplementing Regulation (EU) No 575/2013 with regard to liquidity coverage requirement, Article 10(1)(c)(i)-(ii)Primary source
“the central government of a third country, provided that it is assigned a credit assessment by a nominated ECAI which is at least credit quality step 1 in accordance with Article 114(2) of Regulation (EU) No 575/2013;”
ECB holdings under APP and PEPP
Adds 4.8 points to the index
The Eurosystem holds large portfolios of government bonds bought under the Asset Purchase Programme (from 2015) and the pandemic programme PEPP (2020). Reinvestments ended for the APP in July 2023 and for PEPP at the end of 2024, so both portfolios are now running off as bonds mature.
Why it counts: Central bank ownership of a large share of euro-area government debt holds down yields; the passive run-off is slowly reducing it.
Legal basis Decision (EU) 2020/188 of the European Central Bank on a secondary markets public sector asset purchase programme (ECB/2020/9) (recast), Article 1 and 4 more
Decision (EU) 2020/188 of the European Central Bank on a secondary markets public sector asset purchase programme (ECB/2020/9) (recast), Article 1Primary source
“The Eurosystem hereby establishes the PSPP under which the Eurosystem central banks shall purchase eligible marketable debt securities, as defined in Article 3, on the secondary markets,”
Decision (EU) 2020/440 of the European Central Bank on a temporary pandemic emergency purchase programme (ECB/2020/17), Article 1(1)Primary source
“The Eurosystem hereby establishes the temporary pandemic emergency purchase programme (‘PEPP’) as a separate purchase programme, with an overall envelope of EUR 750 billion.”
ECB press release: Monetary policy decisions, 15 June 2023Primary source
“The Governing Council confirms that it will discontinue the reinvestments under the asset purchase programme as of July 2023.”
ECB press release: Monetary policy decisions, 14 December 2023Primary source
“Over the second half of the year, it intends to reduce the PEPP portfolio by €7.5 billion per month on average. The Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.”
Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank, Article 18.1Primary source
“operate in the financial markets by buying and selling outright (spot and forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments,”
Zero risk weight for EU sovereign debt in domestic currency
Adds 3.4 points to the index
Under Article 114(4) of the Capital Requirements Regulation, banks' exposures to EU member state central governments and central banks that are denominated and funded in the domestic currency carry a 0% risk weight, regardless of the country's credit rating.
Why it counts: Banks can hold unlimited sovereign bonds without capital, encouraging them to fund governments, often their own, rather than lend to the private sector.
Legal basis Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms (CRR), Article 114(4)
Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms (CRR), Article 114(4)Primary source
“Exposures to Member States' central governments, and central banks denominated and funded in the domestic currency of that central government and central bank shall be assigned a risk weight of 0 %.”
Sovereign exemption from large-exposure limits
Adds 1.5 points to the index
Article 400 CRR exempts exposures that would get a 0% risk weight, including those to EU central governments, from the 25%-of-capital large-exposure limit that applies to other counterparties.
Why it counts: Banks can concentrate holdings in a single government without limit, which deepens the bank-sovereign link.
Legal basis Regulation (EU) No 575/2013 (CRR), Article 400(1)(a) and 1 more
Regulation (EU) No 575/2013 (CRR), Article 400(1)(a)Primary source
“asset items constituting claims on central governments, central banks or public sector entities which, unsecured, would be assigned a 0 % risk weight under Part Three, Title II, Chapter 2;”
Regulation (EU) No 575/2013 (CRR), Article 395(1)Primary source
“after taking into account the effect of the credit risk mitigation in accordance with Articles 399 to 403, to a client or group of connected clients the value of which exceeds 25 % of its eligible capital.”
Enacted, not yet in force (2)
EU-wide EUR 10,000 cash payment limit (AMLR)
Counts in the outlook only: adds 0.9 points once it applies
The Anti-Money Laundering Regulation (EU) 2024/1624, adopted on 31 May 2024 and published on 19 June 2024 (in force since July 2024 but applying only from 10 July 2027), will ban cash payments above EUR 10,000 in commercial transactions across the EU from 10 July 2027. Member states may keep lower national limits, such as Spain's EUR 1,000 and the Netherlands' EUR 3,000 from 2026.
Why it counts: Limits on using cash reduce the ability to hold and spend savings outside the banking system.
Legal basis Regulation (EU) 2024/1624 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AMLR), Article 80(1)-(3) and 1 more
Regulation (EU) 2024/1624 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AMLR), Article 80(1)-(3)Primary source
“Persons trading in goods or providing services may accept or make a payment in cash only up to an amount of EUR 10 000 or the equivalent in national or foreign currency,”
Regulation (EU) 2024/1624 (AMLR), Article 90Primary source
“It shall apply from 10 July 2027, except in relation to obliged entities referred to in Article 3, points (3)(n) and (o), to which it shall apply from 10 July 2029.”
AMLR ban on anonymous crypto accounts and privacy coins at providers (from July 2027)
Counts in the outlook only: adds 2.1 points once it applies
The AML Regulation (EU) 2024/1624, adopted on 31 May 2024 and published on 19 June 2024, will prohibit credit institutions, financial institutions and crypto-asset service providers from keeping anonymous crypto-asset accounts or any account allowing the anonymisation or increased obfuscation of transactions, including through anonymity-enhancing coins. It applies from 10 July 2027.
Why it counts: From July 2027 it pushes privacy coins off EU providers, so exits into crypto through regulated channels become traceable.
Legal basis Regulation (EU) 2024/1624 (Anti-Money Laundering Regulation), Article 79(1) and 1 more
Regulation (EU) 2024/1624 (Anti-Money Laundering Regulation), Article 79(1)Primary source
“anonymous crypto-asset accounts as well as any account otherwise allowing for the anonymisation of the customer account holder or the anonymisation or increased obfuscation of transactions, including through anonymity-enhancing coins.”
Regulation (EU) 2024/1624 (Anti-Money Laundering Regulation), Article 90Primary source
“It shall apply from 10 July 2027, except in relation to obliged entities referred to in Article 3, points (3)(n) and (o), to which it shall apply from 10 July 2029.”
Proposed (3)
Savings and Investments Union: savings and investment accounts
Not counted in the index
As part of the Savings and Investments Union strategy (March 2025), the Commission recommended on 30 September 2025 that member states offer simple, tax-advantaged savings and investment accounts. The recommendation is non-binding.
Why it counts: The aim is to move idle deposits into EU capital markets; depending on national design, tax relief may favor domestic or EU assets.
Digital euro holding limit
Not counted in the index
The proposed digital euro regulation would cap how much digital euro an individual can hold, to protect bank deposits. The Council agreed its position in December 2025 and Parliament in July 2026; the size of the limit is still being negotiated in trilogue, with ECB simulations around EUR 3,000.
Why it counts: A cap on holding central bank digital money keeps most savings in bank deposits, where rates are set by banks.
Legal basis Proposal for a Regulation of the European Parliament and of the Council on the establishment of the digital euro, COM(2023) 369 final, 2023/0212 (COD), Article 16(1) and 1 more
Proposal for a Regulation of the European Parliament and of the Council on the establishment of the digital euro, COM(2023) 369 final, 2023/0212 (COD), Article 16(1)Primary source
“the European Central Bank shall develop instruments to limit the use of the digital euro as a store of value and shall decide on their parameters and use,”
Council of the EU, doc. 16695/25: Proposal for a Regulation on the establishment of the digital euro - Mandate for negotiations with the European Parliament, Recital 33aPrimary source
“There should be an overall ceiling, to be set by the Council, for the definition of the holding limits by the European Central Bank.”
Proposed EU financial transaction tax (enhanced cooperation)
Not counted in the index
Ten member states have negotiated an FTT under enhanced cooperation since 2013, but talks are stalled in the Council. The Commission's 2026 work programme signalled its intention to withdraw the proposal.
Why it counts: If adopted it would tax trades in shares and derivatives, lowering net returns on market investments.
Legal basis Proposal for a Council Directive implementing enhanced cooperation in the area of financial transaction tax, COM(2013) 71 final, 2013/0045 (CNS) and 1 more
Proposal for a Council Directive implementing enhanced cooperation in the area of financial transaction tax, COM(2013) 71 final, 2013/0045 (CNS)Primary source
“authorised the Member States listed in its Article 1 to establish enhanced cooperation in the area of FTT.”
Annexes to the Commission work programme 2026, COM(2025) 870 annex, Annex IV: Withdrawals (Council doc. 14261/25 ADD 1), Annex IV, item 1Primary source
“Proposal for a COUNCIL DIRECTIVE implementing enhanced cooperation in the area of financial transaction tax”
Before today
8 examples from Belgium in the toolkit, past and present, grouped by what the tool does. Each links to the instrument, its other examples and the cited law. Examples marked EU apply across the European Union.
SteerSteer savings to the state
Captive demand
Treasury-bill floors and coverage coefficients for banksCoefficients de couverture imposed on Belgian banks, as discussed in the Chamber Finance Committee report on the 1956 Finance Ministry budget (28 February 1956)
1956HistoricalPrudential sovereign bias
Fund diversification-limit exemptions for government securitiesDirective 2009/65/EC (UCITS IV), Article 54 (derogation from Article 52 issuer limits)
EU1985 → nowIn forcePrudential sovereign bias
Large-exposure and concentration-limit exemptions for sovereignsRegulation (EU) No 575/2013, Article 400(1)(a)
EU2014 → nowIn forcePrudential sovereign bias
Zero risk weights for sovereign exposuresRegulation (EU) No 575/2013 (Capital Requirements Regulation), Article 114(4)
EU2014 → nowIn forcePrudential sovereign bias
Liquidity Coverage Ratio Level 1 treatment of government bondsCommission Delegated Regulation (EU) 2015/61, Article 10(1)(c)
EU2015 → nowIn forcePrudential sovereign bias
Insurance solvency rules exempting sovereign bondsCommission Delegated Regulation (EU) 2015/35 (Solvency II), Article 180(2)
EU2016 → nowIn forcePrudential sovereign bias
Money-market-fund reforms favouring government-debt fundsRegulation (EU) 2017/1131 on money market funds, Article 2(11)
EU2019 → nowIn forcePrudential sovereign bias
Leverage-ratio exclusions for government securities and central-bank reservesRegulation (EU) 2020/873 (CRR 'quick fix'), amending Article 429a of Regulation (EU) No 575/2013
EU2020 → nowIn force
Further reading
- Monetisation: Do not panic
Pisani-Ferry, Blanchard · CEPR, 2020
Argues, from the April 2020 perspective, that pandemic bond purchases did not themselves establish fiscal dominance or inevitable inflation. Whether central banks later raise rates and remunerate reserves matters more than the initial scale of purchases.
- Macroprudential tools, capital controls, and the trilemma: Insights from the Bretton Woods era
Monnet · CEPR, 2018
Shows that Bretton Woods capital controls often made domestic credit controls effective rather than simply sustaining international interest-rate gaps. This cautions against measuring repression or monetary autonomy solely from observed interest-rate differentials.
- Financial Repression: Evidence and Theory
Chari, Dovis, Kehoe · Federal Reserve Bank of Minneapolis, 2016
Explains how compulsory bank holdings can strengthen a government’s commitment to repay by making default more costly. The model supports repression only under urgent financing needs and weak repayment credibility, because the benefit comes at the expense of productive private investment.
- The Political Origin of Home Bias: the case of Europe
De Marco, Macchiavelli · Federal Reserve Board, 2016
Finds that government-owned banks and banks with politicians on their boards held more domestic sovereign debt during the euro-area crisis. Government-owned banks increased this bias during stress, including after recapitalization, supporting a political-pressure explanation for some holdings.
- The Liquidation of Government Debt
Reinhart, Sbrancia · IMF, 2015
Reconstructs government debt portfolios to measure the transfer from savers to governments when controlled interest rates combine with inflation. It finds substantial postwar debt liquidation and explains why high debt after the global financial crisis could revive these policies.
- Tracking Global Demand for Emerging Market Sovereign Debt
Arslanalp, Tsuda · IMF, 2014
Extends sovereign investor-base measurement to emerging markets, separating domestic banks, nonbanks and central banks from foreign holders. It documents post-crisis foreign inflows and country differences in banks’ government-debt exposure, useful for evaluating funding dependence and potential captive demand.
- Tracking Global Demand for Advanced Economy Sovereign Debt
Arslanalp, Tsuda · IMF, 2012
Builds comparable sovereign-debt holdings by investor group and introduces indicators of exposure to investor withdrawals. It documents increased bank exposure to home-country government debt after 2008, providing data for studying captive demand without assuming every domestic holding is coerced.
- Financial repression: Then and now
Reinhart, Kirkegaard · CEPR, 2012
Documents the post-2008 return of negative real rates and policies that encourage domestic institutions to absorb public debt. The authors interpret preferential regulatory treatment, pension restrictions and deposit-rate limits as possible modern forms of repression.