MNB Announces Financial Measures to Mitigate Impact of COVID-19

In particular, MNB made the following decisions:

• MNB will provide relief from maintenance of the systemic risk buffer in relation to commercial real estate project loan exposures until the end of 2020.
• The Internal Capital Adequacy Assessment Process (ICAAP) reviews of banks will be suspended until September 30, 2020, while the presently valid capital adequacy ratios expected by MNB will be maintained. The institutions may request the ICAAP review to be conducted if they are able to allocate proper resources and MNB will make a decision on such requests.
• In case of a possible violation of the Pillar 2 capital guidance, MNB will not apply the set of supervisory tools at its disposal.
• Meeting of the level of the minimum requirement for own funds and eligible liabilities (MREL), which is planned for 2020, will be postponed by six months.
• The on-site examinations of financial organizations will be postponed by two months. For examinations that do not require on-site presence, only the most important ones will be initiated.
• The on-site phases of reviews related to the Internal Liquidity Adequacy Assessment Process (ILAAP) will be cancelled until December 31, but MNB will monitor liquidity more closely based on regular data supplies

Keywords: Europe, Hungary, Banking, COVID 19, MREL, Macro-Prudential Policy, Pillar 2, ICAAP, ILAAP, Capital Adequacy, Systemic Risk Buffer, MNB