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
EBA Updates Single Rulebook Q&A in August 2020Related Articles
EIOPA Report Analyzes Use and Impact of Long-Term Guarantee Measures
EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.
BIS, SNB, and SIX Announce Successful Completion of CBDC POC
The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.
EBA Sets Out Treatment of Certain Banking Book Positions Under FRTB
EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.
EIOPA Consults on Integrating Climate Change into SII Standard Formula
EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.
EU Issues Corrigenda to Investment Firms Directive and Regulation
EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.
MAS Proposes Changes to Rules Arising from Banking Amendment Act
MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.
PRA to Elaborate on Approach to Transposition of CRD5 by Mid-December
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
RBNZ Consults on Aspects of Insurance Act, Solvency Standards & IFRS17
RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.
SRB Sets Out Work Program for 2021-2023
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA Consults on KPIs on Sustainability for Non-Financial Reporting
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.
