The European Central Bank (ECB) has issued an administrative penalty of €6.94 million ($8.0mn) to Belfius Banque due to non-compliance with the requirements related to the implementation of internal models. Such models measure the risk held by the bank on its balance sheet.
Specifically, the bank did not meet the deadline of January 2024 to implement the new internal models for calculating credit risk parameters and to submit an audit report testing and validating these models.
In June 2021, the bank had requested to modify its outdated models to comply with regulatory requirements. After obtaining ECB permission, the bank was required to implement the approved changes to the internal models by January 2024. In addition, the bank’s internal audit function was requested to test and validate the amended internal models. The duration of the breach lasted from January 2024 to March 2025.