MNB Maintains CCyB at 0%, Ceases Dividend Payout Restrictions
The Hungarian National Bank (MNB) decided not to extend the restrictions imposed on dividend payments, share repurchases, and performance bonuses in the credit institution sector, in response to the economic uncertainties caused by COVID-19 pandemic; the restrictions have ended on December 31, 2021. This MNB decision is in line with the ECB decision to lift the dividend distribution restrictions. In addition, the Financial Stability Board (FSB) of MNB decided to maintain the countercyclical capital buffer (CCyB) rate applicable to domestic exposures at 0% after January 01, 2022.
The Board also did not adjust the 0% CCyB rates applicable to the exposures of the domestic banking system in material third countries (Albania, Montenegro, Russia, Serbia, and Ukraine). MNB regularly monitors and evaluates the cyclical systemic risks of third countries outside the European Union that are material for the domestic banking system. MNB reviews the rate of the countercyclical capital buffer applicable to domestic exposures on a quarterly basis and the rates applicable to material third countries annually.
Keywords: Europe, Hungary, Banking, COVID-19, CCyB, Regulatory Capital, Basel, Dividend Distribution, Third Countries, Systemic Risk, MNB
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