Lieve Lowet

Lieve Lowet

EU Affairs consultant and lobbyist

How Belgium Managed in One Week to Mobilize 22 Billion euro in Capital from Households

03 October 2023

In less than a week, the Belgian treasury managed to raise a total of 21.896 billion euro from retail investors and savers for a hardly announced government bond, four times its target. It was the talk of the town, and a success nobody had imagined. It will go down in history as the largest capital operations of the Belgian government among its citizens. Belgium was not the only country in the EU which recently went directly to its citizens: also Italy, Portugal and Greece have done so. But why was the Belgian issuance such a roaring success ?

Here are a few observations:
• The duration of the bond is limited: one year (whereas it is usually 3 to 10 years);
• Only retail investors could subscribe;
• There was a very low minimum inlay of 100 euro;
• There was no maximum inlay as long as it was a multiple of 100 euro. For the treasury, the sky was the limit. Prior to the Staatsbon operation, Belgian households held about 108 billion euro in current accounts, 30 bio euro is term deposits, 293 billion euro in regulated savings accounts and about 4 billion in non-regulated savings accounts (NBB, online statistics, 2023M7 outstanding amounts, Belgian households). According to some sources, the average inlay was 30272 euro, not your average small saver?
• The ‘staatsbon/bon d’état’ had a lower withholding tax (15% instead of 33%) than any other investment (except the regulated savings deposits);
• The coupon on the bond was an attractive 3,3%, resulting in a 2,81% net return;
• There was a very limited subscription period: only one week, from 24 August till 1 September, so decisions had to be taken rather quickly. Word of mouth worked, in many families it was the talk of the day;
• Subscription was possible via the website of the debt agency or via your bank;
• The direct digital access for retail investors and savers to the website of the Debt ledger of the Belgian treasury ( was extremely easy, accessible and quick, via the use of a digital e-ID resulting in a subscription page prefilled with your personal data; all you needed to do was decide on the amount and transfer the funds. There was no need to have a securities account, nor a custodian account (with corresponding fees although the major banks for this issuance decided to forego their custodian fees). This digital subscription was a first, and according to some commentators, a real revolution; 234310 citizens did subscribe directly. Subscription via the banks was also possible, 400000 citizens did subscribe via their bank;
• The information on the Debt agency’s website was clear and to the point. The product info was straight forward, no whistle and bells (as also the product was simple);
• There was no prospectus to read and no MIFID or demands and needs tests or the like;
• The bond, unlike bank and savings deposits, is not subject to a deposit insurance limit;

Clearly, this operation was a win-win-win operation, for the Treasury, the Belgian government and the savers/investors. . The Belgian government, which hoped for 5 billion euro and got the quadruple of it, has shown internationally that it can mobilize domestic retail investors and private savings, avoiding to find financing in the international market. It lowered its international debt servicing cost, the interest difference with Germany decreased with 4 BP, and with France with 3 BP. According to some sources, the Belgian government reduced by 152 million euro its debt servicing costs over the next decade. It also avoided fees to be paid to the banks. This may give inspiration for future retail issuance.

The administration, and especially services of the Belgian ministry of finance, managed to reach the retail savers directly, from youngsters to grandma’s, even the less digital savvy. The Debt Agency got inundated with questions of citizens wanting to subscribe. The savers/investors perceived this bond massively as a safe place for their savings with a better net return than a classical callable savings account or a one-year term deposit or other comparable investments which need minimum inlays or have a higher perceived risk, even if the staatsbon/bon d’état is remunerated below inflation, but with a smaller gap.

What about the banks who saw about 22 bio euro disappear in liquidity, or 7,4% of the 296 billion euro parked in savings deposits by Belgian banks or 5,4% of the liquid deposit base. This was more than the last ECB’s stress test of a liquidity shock of 5% over 30 days. No Belgian bank declared that there was a liquidity issue.

For some time, the Belgian government has been trying to press banks into raising the interest rates on deposits, with limited success. Were they relying too much on the inertia of their customers? One reason the banking sector is reluctant to remunerate savers is because these savings, considered as a stable funding source, are invested in commercial credit and mortgage loans, with fixed rates and a longer duration. But is that the whole story?

I for sure am curious to observe which products the banking sector will develop in the meantime? Will the banking sector understand that this ‘experiment’ is one large lesson and learning opportunity? Next year on 1 September, 22 billion euro will become available. Will it flow back into savings accounts? Or will savers become more investment savvy and tip their toes deeper into the investment water?

Belgium was not the only country in the EU which went directly to its citizens: Italy, Portugal and also Greece have done so recently and in the past.

Since 2015, the EU has been planning to get more savers into investments, now more than ever needed for the transition to a green economy. Multiple meetings, plans, reports, initiatives and the like have been organized and written since then, without creating a major shift from savings to the capital market. True, government bonds are not listed shares. Nevertheless, I wonder whether the Belgian low profile but straight forward Staatsbon/bon d’etat experience, holds a lesson, where without big Capital Markets Union plan savers became investors in one week?

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