28 September 2017

The Magyar Nemzeti Bank has set the countercyclical capital buffer rate applicable from 1 October 2017. The level of the cyclical systemic risks is low, therefore the Financial Stability Board - with a view to supporting lending - has decided to maintain the 0 per cent rate.

The purpose of the countercyclical capital buffer is to increase the stability and resilience of the financial intermediary system across credit cycles. The MNB sets the level of the countercyclical capital buffer on a quarterly basis.

Compared to the previous quarterly review, despite the revival observable in the credit market, there is no substantive change in the level and dynamics of cyclical systemic risks. Though the turnaround of lending was achieved both in the household and corporate segments, the net credit outflow can not be considered as excessive. The degree of the persistently and significantly negative benchmark credit-to-GDP gap, as well as the current level and dynamics of the supplementary indicators on overheating and vulnerability signal low level in the cyclical systemic risks. Accordingly, the Financial Stability Board of the MNB has decided to maintain the countercyclical capital buffer rate applicable to domestic exposures at 0 per cent. Foreseeably no change is expected over the forthcoming one-year horizon, what may support lending activity of credit institutions.

Besides setting the actual capital buffer rate, in order to support the determination of the applicable countercyclical capital buffer rate the MNB has implemented methodological developments that affected the supplementary indicators of the systemic risk map. Based on the empirical literature the list of overheating indicators were complemented with two new indicators measuring non-financial corporations’ and households’ credit growth.

Further information on the countercyclical capital buffer and other information necessary for the functioning thereof

Magyar Nemzeti Bank