Belgium came one step closer to becoming a covered bond issuing jurisdiction after the country’s lower house of parliament yesterday (Wednesday) adopted draft legislation, with finance minister Steven Vanackere highlighting the contribution a legal framework can make to ensuring the stability and sustainability of Belgian financial institutions.

The two pieces of legislation that make up the proposed framework were passed by 101 votes to 40 in the House of Representatives, with two parties, N-VA (new Flemish Alliance) and Vlaams Belang (Flemish Interest) voting against.

The draft laws are on the discussion and voting agenda in the Senate today (Thursday).

Members of the parties that voted against the legislation had taken the floor during the plenary to set out the reasons why they would be opposing the draft laws, citing, among others aspects, risks to consumers, asset encumbrance concerns, and parallels with securitisation, with Hagen Goyvaerts, of VB, for example, warning of “the start of a new banking adventure”.

Finance minister Steven Vanackere said that he had “the utmost respect” for the politicians’ observations of certain risks, but said that he wanted to underline that by doing what is necessary so that Belgian financial institutions have access to funding opportunities, on terms as attractive as those for their competitors, “we can better guarantee the stability and sustainability of our Belgian institutions”.

“In doing this we will not be increasing the risks for either the state or depositors, but rather stabilising the Belgian financial sector,” he said.