National Bank of Belgium is the highest authority of private banks and saving banks, financial institutions or any other enterprises that fall within the limitations of law in Belgium governed by Chapter 1 of the Law of 10th June, 1964. Banking is a major industry in Belgium and there is a successful per capita for largest number of banking branches operating in Belgium as compared to any banking sector in the world.
Belgium has made a significant growth by making the entire banking sector as electronic banking system, ATMs or computer Internet banking by bringing almost all the transactions to the doorstep of consumer. There are very few little things are not permitted with ATMs or computer for banking transactions in Belgium. Further opening or maintaining personal accounts are expensive in Beligum as compared with UK or US whereas much lower when compared to France or Italy. Banks in Belgium charge a separate rate for every transaction viz.
, credit cards, debit cards, Internet banking or ATM service. Some of the major banks in Belgium are : Argenta, Banks Bruxelles Lambert, Belgian Bank, Dexia, Fortis, Generale Belgiun Bank, Hypo Group Alpe Adria, KBC Bank, Societe Generale de Belgique. National Bank of Belgium is a member of European System of Central Banks. The governor of National Bank is a member of Governing Council in decision making of monetary policies, the National Bank of Belgium has an active participation and execution of decisions.
Some of the tasks held by NBB are as follows: 1. The printing of euro currency notes and circulating euro coins and currency notes. 2. Maintaining a complete record of economic and financial information. 3. Maintaining the stability of Belgian financial sector. 4. Rendering banking services for Belgian State. 5. Rendering services for general public. The headquarters of NBB are at Brussels established in 1950 and its Governor being Guy Quaden and NBB is succeeded by European Central Bank (1999).
China Exim Bank is performing on line lending banking business which is provided by 18 foreign governments and two financial institutions in which Belgium is included. There are prescribed lending policies and terms and conditions for online lending business. Especially in terms and conditions, governments differ in quoting interest rates and maturity periods. For example Japanese Government on lending maturity period ranges between 30 – 40 years with interest rate ranging from 0. 75 per cent – 2. 2 per cent while German Government loan matures as early as 15-20 years with interest rate between the range of 0.
75 per cent to 3. 25 percent. Foreign Government loans are provided on concession that is in turn provided by foreign government to Chinese Government. The offer of mixed credit is a combination of both concessional loan along with export credit or a commercial loan that is provided by a foreign bank. In Germany, universal banks hold a sizeable portion of shareholding in non-financial firms. Cross shareholding between banks, insurance companies and non-financial firms is also in practice especially by the banks in France and Italy. .
In Japanese banking sector, shareholding in non-financial firms is also existent apart from European Banks keeping the role of banks in corporate governance as an important issue. Germany and Japan are playing a key role in maintaining non-financial firms and American Commentators have stated in this regard “that it is no exaggeration to say that the universal bank sits at the epicenter of German corporate governance” (Peter O Mulbert, 1997) Shareholding of German Banks in non-financial firms is also helpful in corporate monitoring, protecting the interest of shareholders and societal benefits.
Up to the period of mid 1990s there were huge shareholding patterns in non-financial firms by banks and after 1997 a steep cut was made in shareholding pattern especially in OECD countries, when the banking crisis was worsening, a new Act called Banks’ Shareholding Purchase Corporation in 2002, was enacted and Bank of Japan began to buy shares from certain banks under certain conditions. “The declining level of cross-shareholding should continue to facilitate a further development of the M&A market in Japan, thus expanding the scope for cross-border deals that boosts FDI inflows.
However, the share of cross-border deals fell from a peak of 11% of total M&A in Japan in 1999 to 9% in 2004”. (Koo Yang, 2006, OECD) Banks face various different kinds of risks such as in recovery of loans, payments of interests on loans, debt recovery, and above all credit risk. Further risks faced by banks are interdependent which are basically of two kinds. (1) Enterprise-wide risks (2) Financial Risks.
Further Enterprise-wide risk is divided into business risk and operational risk whereas financial risk is divided into market risk, liquidity risk and credit risk. Liquidity risk is associated with funding and credit risk is associated with investments and borrowers. Financial institutions adopt Enterprise Risk Management Program (ERM) viz. , Barclays Bank, Bank of Montreal CitiGroup, JP Morgan Chase, CSFB, Deutsche Bank, Goldman Sachs, Merriyll Lynch, Morgan Stanley and UBS.
Apart from the above, a major risk areas has been developed with Internet banking facility which causes viruses and worms that cost banks more than $ 1 billion per year that has been found out by Business Roundtable which is a trade group of executives for 150 largest corporations of America. In 2003, financial institutions have recorded a theft loss of nearly $ 48 billion and total loss that is caused due to the breach of IT security amounted to $ 455. 8 million in the year 2002.
This loss includes security breaches in computerized banking services such as computer worm, mishandling of information, or any other kind of computer attacks. Some of the major risks that are erupting out of Internet and computer banking are : (1) Mishandling of electronic data (2) leakage of information through computer skills and exploiting bankers to that effect. (3) Threatening the privacy of financial information of banks (4) attacks through entering a wrong code which corrupts the system or electronic data. (5) damage to intellectual property laws through web site.