Featured Product

    MNB Report Discusses Macro-Prudential Policy Amid Crisis

    October 02, 2020

    MNB published a report that examines the macro-prudential measures of the past more than one and a half years. The report also explores the impact of previous regulations on the current risks posed by the pandemic as well as the steps taken in response to the pandemic. In the future, MNB will focus on changes in the EU financial regulatory framework, the potential consequences of climate change and green transition for financial stability, and the effects of expanding the range of certified consumer-friendly products.

    Owing to the macro-prudential framework built in recent years, the domestic banking system has faced the coronavirus epidemic in a stable state and is still able to play its role of financing the economy. The healthy structure of the retail loan portfolio, supported by "debt brake rules" as well as the release of capital buffers in the Spring helped maintain banks' lending capacity. The capital buffer rates previously prescribed for 2020 will have to be gradually rebuilt by the concerned banks between 2022 and 2024. Furthermore, in 2020, the central bank will not review the systemic risk capital buffer rates, to avoid the negative lending effects of the buffer, which may be created due to the possible increase in the non-performing project loan portfolio in connection with the epidemic situation. 

    Due to the 2019 amendment of the "Single European Code" defining the prudential requirements for financial institutions, the framework of macro-prudential regulation will also change from 2021. The changes mainly concern the application of capital buffer requirements: a novelty in connection with the systemic risk capital buffer is the expansion of the range of risks that can be covered and the possibility of prescribing on a sectoral basis. In the future, MNB will examine the need to adapt its regulations to these changes. MNB has begun to explore the exposure of the domestic financial system to potential systemic risks due to climate change. Looking to the future, MNB is examining the possibilities of achieving green goals through prudential incentives, primarily in connection with the mortgage bond market. The central bank is also examining the possibility of developing incentives for the banking system to move toward green financing in macro-prudential regulation.


     

    Related Links

    Keywords: Europe, Hungary, Banking, Macro-Prudential Policy, CCyB, Systemic Risk Buffer, Climate Change Risk, ESG, COVID-19, MNB

    Featured Experts
    Related Articles
    News

    EC Regulation Sets Out Standards for Reporting and Disclosure of MREL

    EC published the Implementing Regulation 2021/763 that lays down implementing technical standards for supervisory reporting and public disclosure of the minimum requirement for own funds and eligible liabilities (MREL).

    May 12, 2021 WebPage Regulatory News
    News

    EBA Report Notes Loan Origination Should Remain in Supervisory Focus

    EBA published a report that examines the convergence of prudential supervisory practices in 2020 and offers conclusions of the EBA college monitoring activity.

    May 12, 2021 WebPage Regulatory News
    News

    APRA Decides to Standardize Submission Date for Quarterly Reporting

    APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.

    May 11, 2021 WebPage Regulatory News
    News

    ECB Working Group Publishes Recommendations on EURIBOR Fallbacks

    The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).

    May 11, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Supporting Documentation for Reporting by Banks

    Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.

    May 11, 2021 WebPage Regulatory News
    News

    EBA Publishes Phase 1 of Reporting Framework 3.1

    EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).

    May 10, 2021 WebPage Regulatory News
    News

    IOSCO Sees Support for Mandatory Sustainability Reporting

    The Sustainable Finance Taskforce of IOSCO held two roundtables, with global stakeholders, on the IOSCO priorities to enhance the reliability, comparability, and consistency of sustainability-related disclosures and to collect views on the practical implementation of a global system architecture for these disclosures.

    May 10, 2021 WebPage Regulatory News
    News

    APRA to Finalize Capital Adequacy Standard Revisions by January 2022

    Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA

    May 10, 2021 WebPage Regulatory News
    News

    ESMA Issues Guidelines on Outsourcing to Cloud Service Providers

    ESMA published the final guidelines on outsourcing to cloud service providers.

    May 10, 2021 WebPage Regulatory News
    News

    EBA Publishes Data on Deposit Guarantee Schemes

    EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.

    May 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6967