MNB to Introduce Bank Capital Requirement Discounts for Green Lending
MNB and European Bank for Reconstruction and Development (EBRD) organized an international online conference on green finance. The discussions at the conference focused on the assessment and quantification of the adverse economic effects of climate change, energy efficiency investments to achieve a green recovery from the COVID-19 pandemic, and funding opportunities for renewable energy production. MNB announced that it will shortly introduce new bank capital requirement discounts supporting green corporate lending, while transforming its own operations to become fully net zero carbon.
Csaba Kandrács, Deputy Governor of MNB, highlighted that MNB the new capital requirement discount to support green corporate lending would initially cover renewable energy investments and green bonds purchases. He added that MNB will become completely carbon-neutral. It will offset its emissions in 2020 by financing ecological investments next year. In the meantime, it plans to reduce its emissions significantly primarily by swapping its energy consumption for green energy.
At the meeting several speakers discussed financial risks of environmental nature. In their speeches, Ma Jun, Special Advisor to the Governor of PBC, and Jo Paisley, Co-President of GARP Institute, underlined that financial institutions have started assessing the adverse effects arising from climate change and have begun to implement them into their risk management procedures, but there was much to be done urgently. In addition, Sean Kindey, co-founder and CEO of the Climate Bonds Initiative, described the global trends in the green bonds market. He noted that the growth of these new types of instruments was not restricted by COVID-19 pandemic. The closing panel discussion clarified the potential opportunities offered by green bonds for Central Europe, pointing out that green bonds may provide additional funds the for necessary investment projects in the region.
Related Links
Keywords: Europe, Hungary, Banking, COVID-19, Climate Change Risk, ESG, Green Bonds, Regulatory Capital, EBRD, Sustainable Finance, MNB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
BoE and FCA Launch Public Private Forum on Artificial IntelligenceRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.
