Featured Product

    MNB Issues Multiple Regulatory Updates for Banks

    June 30, 2021

    The Hungarian National Bank (Nemzeti Bank or MNB) announced its decision to maintain the countercyclical capital buffer (CCyB) rate at 0% from July 01, 2021. MNB also revised its regulation on the Mortgage Funding Adequacy Ratio (MFAR). According to the amendment, from July 01, 2021, green mortgage-backed funds can be taken into account in the calculation of the ratio with a preferential weighting. Based on the decision of the Financial Stability Board of MNB, green mortgage-backed funds with an original maturity of more than 5 years may be taken into account with a higher weight of 1.5 when calculating the MFAR.

    For the labeling of mortgage bonds as green, MNB requires banks to follow standards that are widely accepted and employed internationally to support bank adjustment and investor orientation. In addition to the preferential treatment of green mortgage-backed funds, the Financial Stability Board also made changes in the regulation supporting the reduction of the sector-level HUF maturity mismatch: raising the required minimum level of the ratio from 25% to 30%, expecting newly issued mortgage bonds to be listed on a stock exchange, and reintroducing the restrictions on cross-ownership of mortgage bonds by banks (which were suspended due to pandemic). These changes will take effect on October 01, 2022, to ensure adequate preparation time for banks and are not expected to cause significant adjustment difficulties for them, given the preferential weighting of green liabilities.

    In a separate statement, MNB suggests borrowers to resume repayment of their loans as soon as possible. Interest will accrue on the outstanding loan even in the period during the repayment moratorium. This can be repaid in equal annual installments (not capitalized) by extending the term, and the monthly repayment is the same as calculated when ordering the payment stop. Extending the term and evenly repaying also means that individual customers continue to use the bank’s money, which means that they have to pay more money to their credit institution overall. However, those who do not want to repay more interest and their financial situation allows, it is worth starting to repay their loan again as soon as possible.

     

    Effective Date: July 01, 2021/October 01, 2022

    Keywords: Europe, Hungary, Banking, ESG, COVID-19, Loan Moratorium, Loan Repayment, Credit Risk, CCyB, Regulatory Capital, Mortgage Funding Adequacy Ratio, Sustainable Finance, MFAR, MNB

    Featured Experts
    Related Articles
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699