MNB Announces CCyB Rate and Measures to Support Lending Amid Pandemic
MNB announced transitional measures for the supervisory capital requirements for credit institutions, indicating that it will temporarily tolerate a possible breach of the capital buffer requirement. However, MNB expects market participants to meet this capital buffer requirement by at least 50% by June 30, 2022 and to comply fully with the requirement by January 01, 2023. MNB also recommended that credit institutions should maintain restrictions on dividend payments, share repurchases, and variable remuneration payment until September 30, 2021. As another announcement, MNB conveyed the decision to maintain the countercyclical capital buffer (CCyB) rate at 0% from January 01, 2021.
Finally, as an amendment to the management circular on credit risk factors under IFRS 9, MNB published the detailed guidelines on the application of default and restructuring categories with respect to the repayment moratorium. EBA had recently decided to extend the application of its guidelines on payment moratoria until March 31, 2021. This states, inter alia, that bank exposures with a moratorium of more than nine months must be classified as restructured by credit institutions if the payment was rescheduled or rescheduled after September 30, 2020. According to the MNB circular, despite the restructured rating, it is not necessary to reclassify corporate exposures for which there is no financial difficulty according to the monitoring data. In the case of the retail portfolio, the central bank develops a system of conditions through which it is possible to objectively filter out clear cases in which it is also not necessary to classify in the category resulting in higher impairment. Retail exposures that are subject to higher impairment but are properly repaid within six months of their removal from the moratorium may be reclassified to the safer category and the accumulated impairment may be released.
Keywords: Europe, Hungary, Banking, Regulatory Capital, COVID-19, CCyB, Dividend Distribution, Basel, Loan Moratorium, Reporting, Macro-Prudential Policy, IFRS 9, Credit Risk, 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.

Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Previous Article
PRA Proposes Approach for Supervision of International BanksRelated Articles
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023
ISSB Standards May Become Effective from January 2024
The International Organization of Securities Commissions (IOSCO) welcomed the confirmation statement by the International Sustainability Standards Board (ISSB) setting out its progress in the development of its first sustainability-related corporate disclosure standards.