IDEAS home Printed from
   My bibliography  Save this article

Foreign financial transactions of Belgian non-financial sectors


  • V. Baugnet

    (National Bank of Belgium, Research Department)

  • P. Stinglhamber

    (National Bank of Belgium, Research Department)

  • M.-D. Zachary

    (National Bank of Belgium, Research Department)


The open character of the Belgian economy is also reflected in its financial relations with other countries. At the end of 2007, Belgium’s net foreign assets totalled around 44.4 p.c. of GDP. In the past decade, Belgium’s net financial assets have shown a marked increase, against the backdrop of the introduction of the common currency and the progressive financial integration and globalisation. The degree to which the various non-financial sectors have responded to these developments varies greatly between sectors. The public sector is the one which has done most to adjust its financing and seen the biggest rise in the share of the rest of the world in its total debt, namely from 20 p.c. at the end of 1997 to around 46 p.c. at the end of 2007. When the euro was introduced on the financial markets, it was imperative for the Treasury to widen its investment base : appropriate diversification of the corps of Primary Dealers and Recognised Dealers was one of the ways in which it achieved that. Non-financial corporations, which traditionally maintain very close international financial contacts, still saw a steady increase in the share of the rest of the world in their financial transactions between 1997 and 2007 : during that period, in the case of financial liabilities, the figure was up from 24 p.c. at the end of 1997 to over 37 p.c. at the end of 2007 ; for financial assets, the share was up from 28 p.c. to 39 p.c. However, these orders of magnitude are subject to a strong upward influence exerted by the coordination centres based in Belgium, which perform the function of a financial intermediary for the multinational group to which they are attached. In the past decade, there have been frequent exchanges of shareholdings between Belgian and foreign companies, reflecting the process of mergers and acquisitions, and these have also contributed to the growth of direct investment between Belgium and the rest of the world. Another point worth mentioning is that the past decade has brought a strong rise in loans granted by foreign financial institutions as a percentage of total bank lending to Belgian firms : that figure increased from 12 p.c. at the end of 1997 to 35 p.c. at the end of 2007. The share of foreign assets in the household portfolio dropped from 30 p.c. at the end of 1997 to 17 p.c. at the end of 2007. Naturally, that is due partly to the introduction on 1 July 2005 of the European directive on the taxation of savings ; it has now ceased to be possible for individuals to avoid the tax on income from interest-bearing assets held in other countries, and that has ultimately led to the repatriation of those assets. In contrast, in the case of non interest-bearing assets, foreign investment flows increased between 1997 and 2007. Finally, it should be pointed out that the share of the rest of the world in the liabilities of households is still negligible.

Suggested Citation

  • V. Baugnet & P. Stinglhamber & M.-D. Zachary, 2008. "Foreign financial transactions of Belgian non-financial sectors," Economic Review, National Bank of Belgium, issue ii, pages 55-67, June.
  • Handle: RePEc:nbb:ecrart:y:2008:m:june:i:ii:p:55-67

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    flow of funds; financial flow;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • F30 - International Economics - - International Finance - - - General
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbb:ecrart:y:2008:m:june:i:ii:p:55-67. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.