MNB to Launch Project on Sustainable Capital Market Strategy
In a recent statement, MNB announced that a project to develop the strategy to facilitate greening of the capital markets in Hungary will be launched in July 2020. The comprehensive, fifteen-month initiative aims to help the capital market to finance investments in support of environmental sustainability and to allow green companies to access more favorable equity or bond funding. The project involves investment service providers, investors and other market players, ministries, and all other key stakeholders.
The project to develop a Sustainable Capital Market Strategy, with the assistance of the European Bank for Reconstruction and Development (EBRD), is supported by the EC Directorate-General for Structural Reform Support (DG Reform). To establish the financing conditions for climate and sustainability plans, the capital market is also required to be mobilized, in addition to the banking sector. Financial instruments such as green bonds or green covered bonds may facilitate other sources of funding to be involved in environmentally friendly investments. They may offer new investment opportunities of positive ecological and social utility to investors, be it investment funds with a sustainability theme, available for the household sector or portfolios of institutional market players.
In Hungary, only a few such sustainable investment opportunities exist. To explore these and to pinpoint and handle potential market failures, the project aims to create an enabling regulatory environment. At the end of the process, recommendations will be made to the government, MNB, and the Budapest Stock Exchange, post which an action plan will be developed containing the proposed measures. As the project continues, MNB will publish documents about strategy conception periodically.
Keywords: Europe, EU, Banking, Securities, ESG, Green Program, Sustainable Finance, Climate Change Risk, MNB, EC
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
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