Featured Product

    MNB Introduces Capital Relief for Green Lending, Confirms List of SIIs

    December 09, 2020

    MNB announced that the list of systemically important credit institutions (also known as SIIs) domiciled in Hungary has remained unchanged, based on the annual assessment. MNB also maintained its previous decision to temporarily release the buffers from July 01, 2020 in view of the extraordinary circumstances caused by the COVID-19 pandemic. The capital buffer rate of the systemically important institutions will remain 0% in 2021. Institutions will be required to rebuild the buffers gradually in three years starting from 2022. In addition, MNB has introduced the preferential capital requirements for green corporate and municipal financing; it also plans to consult about details of the related reporting requirements with banks in the coming weeks.

    Introduction of Preferential Capital Requirements for Green Corporate and Municipal Financing

    Due to the transition risks related to climate change and other environmental anomalies, MNB considers it desirable that the share of environmentally sustainable (green) industries and customers on bank balance sheets should increase compared to the “brown” exposure. To this end, starting with the Internal Capital Adequacy Assessment Process (ICAAP) reviews of 2021, MNB intends to improve the risk profile of the banking sector and encourage green lending through a positive incentive, by releasing a part or all of the capital requirements prescribed in Pillar 2 of capital regulation for environmentally sustainable corporate and municipal exposures that meet the criteria set out in the detailed terms and conditions. MNB will provide this preferential capital requirements for five years. The preferential capital program will initially cover the financing of renewable energy production (as defined by the EU Taxonomy) and the purchase of (investment in) green bonds, but this list of eligible exposures will gradually expand in 2021. 

    Announcement on Systemically Important Institutions

    MNB has reassessed and reaffirmed the systemic importance of the eight institutions identified last year based on the 2019 year-end data. These institutions are OTP Bank Nyrt., UniCredit Bank Hungary Zrt., Kereskedelmi és Hitelbank Zrt., ERSTE BANK HUNGARY Zrt., Raiffeisen Bank Zrt., MTB Magyar Takarékszövetkezeti Bank Zrt. CIB Bank Zrt., and MKB Bank Nyrt. MNB also published a table that sets out the assessment score for these institutions and the planned transitional path for rebuilding the buffers during 2022-2024. 

     

    Keywords: Europe, Hungary, Banking, COVID-19, Regulatory Capital, ESG, ICAAP, Pillar 2, Systemic Risk, O-SII, Capital Buffers, Sustainable Finance, Climate Change Risk, Reporting, Basel, Transition Risk, MNB

    Featured Experts
    Related Articles
    News

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655