26 September 2016
The Magyar Nemzeti Bank has set the countercyclical capital buffer rate applicable from 1 October 2016. Since the low level of the cyclical systemic risks does not warrant the raising of the countercyclical capital buffer rate, the Financial Stability Board has decided to maintain the current level of 0 per cent with a view to supporting lending.
The purpose of the countercyclical capital buffer is to increase the stability and resilience of the financial intermediary system across credit cycles, and ultimately to ensure the financial system’s sustainable contribution to economic growth. Under European Union and national regulation, the capital buffer rate applicable to Hungarian exposures is defined by the Magyar Nemzeti Bank in its capacity as the macroprudential authority. The Bank revises the applicable capital buffer rate quarterly, after giving due consideration to the capital buffer guide, indicators characterising developments in the banking sector’s cyclical position, as well as, if necessary, additional factors relevant in terms of financial stability.
At present, there is no significant change in the level and dynamics of cyclical systemic risks. The width of the persistently negative benchmark credit-to-GDP gap, as well as the current level and dynamics of the supplementary overheating and vulnerability indicators signal a low level of cyclical systemic risk. Accordingly, the Financial Stability Board of the MNB has decided to maintain the countercyclical capital buffer rate applicable to Hungarian exposures at 0 per cent. No change is expected over the forthcoming one year horizon. This may support the credit institutions’ domestic lending activity.
Magyar Nemzeti Bank