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The MNB strengthens the stability of systemically important institutions with a gradually increasing capital buffer

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Budapest, 4 December 2017 – Conforming to the previous decision of the MNB’s Financial Stability Board, the capital requirement for systemically important institutions has become effective from 2017 and will gradually increase over a four-year period. According to the MNB’s annual review, it is not warranted to change the original schedule; therefore the capital buffer requirement will increase in 2018 as planned. With the gradual approach the MNB in addition to maintaining financial stability supports lending as well.

Potential financial difficulties faced by systemically important institutions may pose a threat to the functioning of the financial intermediary system through contagion effects, and may indirectly lead to problems for the real economy as well. For this reason, the MNB closely monitors their operation in line with EU legislation and at least annually reviews the rates of the specific capital buffers introduced to strengthen their resilience to shocks. In 2017, the MNB identified eight other systemically important institutions (O-SIIs), the same institutions as last year.

In order to strengthen their resilience to shocks, from 2017, the MNB has started to set capital buffer requirements for the institutions affected in the range of 0.5 to 2 percent, which will increase gradually until 2020. In 2018, according to the decision of the MNB’s Financial Stability Board, the capital buffer rates will increase along the phase-in path announced last year. The schedule defined is consistent with international regulatory practices. The adjustment period is expected to enhance financial stability, and, in addition, to contribute to the current pick-up in lending. It also allows sufficient time for the preparation of institutions concerned to meet their obligations.

Scheduling of capital buffer rates for other systematically important institutions

Institution

Capital buffer rate

For 2017

For 2018

For 2019

For 2020

OTP Bank Nyrt.

0.50%

1.00%

1.50%

2.00%

UniCredit Bank Hungary Zrt.

0.25%

0.50%

0.75%

1.00%

Kereskedelmi és Hitelbank Zrt.

0.25%

0.50%

0.75%

1.00%

Magyar Takarékszövetkezeti Bank Zrt.

0.125%

0.25%

0.375%

0.50%

Raiffeisen Bank Zrt.

0.125%

0.25%

0.375%

0.50%

ERSTE BANK HUNGARY Zrt.

0,125%

0.25%

0.375%

0.50%

CIB Bank Zrt.

0.125%

0.25%

0.375%

0.50%

MKB Bank Zrt.

0.125%

0.25%

0.375%

0.50%

Note: The identification in 2017 was based on audited consolidated data as of 31 December 2016. The capital buffer rates for 2019-2020 are indicative, as the MNB carries out the identification and the setting of capital buffer rates every year.

Source: MNB 

Detailed information on the identification of other systemically important institutions