MNB to Launch Project on Sustainable Capital Market Strategy
In a recent statement, MNB announced that a project to develop the strategy to facilitate greening of the capital markets in Hungary will be launched in July 2020. The comprehensive, fifteen-month initiative aims to help the capital market to finance investments in support of environmental sustainability and to allow green companies to access more favorable equity or bond funding. The project involves investment service providers, investors and other market players, ministries, and all other key stakeholders.
The project to develop a Sustainable Capital Market Strategy, with the assistance of the European Bank for Reconstruction and Development (EBRD), is supported by the EC Directorate-General for Structural Reform Support (DG Reform). To establish the financing conditions for climate and sustainability plans, the capital market is also required to be mobilized, in addition to the banking sector. Financial instruments such as green bonds or green covered bonds may facilitate other sources of funding to be involved in environmentally friendly investments. They may offer new investment opportunities of positive ecological and social utility to investors, be it investment funds with a sustainability theme, available for the household sector or portfolios of institutional market players.
In Hungary, only a few such sustainable investment opportunities exist. To explore these and to pinpoint and handle potential market failures, the project aims to create an enabling regulatory environment. At the end of the process, recommendations will be made to the government, MNB, and the Budapest Stock Exchange, post which an action plan will be developed containing the proposed measures. As the project continues, MNB will publish documents about strategy conception periodically.
Keywords: Europe, EU, Banking, Securities, ESG, Green Program, Sustainable Finance, Climate Change Risk, MNB, EC
Previous Article
IOSCO Board Elects Leadership for the 2020-2022 TermRelated Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
HM Treasury Announces G7 Agreement on Green Agenda Ahead of COP26
HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.
