30 March 2017
The Magyar Nemzeti Bank has set the countercyclical capital buffer rate applicable from 1 April 2017. As the low level of the systemic risks does not warrant increasing the countercyclical capital buffer rate, the Financial Stability Board has decided to maintain the 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. Under European Union and national regulation, the capital buffer rate applicable to Hungarian exposures is defined by the Magyar Nemzeti Bank (MNB) in its capacity as the designated macroprudential authority. The central bank revises the applicable capital buffer rate quarterly, after giving due consideration to the capital buffer guide, indicators characterising the development of the banking sector’s cyclical position, as well as, if necessary, additional factors relevant in terms of financial stability. The MNB informs the general public about its decision regarding the countercyclical capital buffer rate on a quarterly basis.
There is no substantive change in the level and dynamics of cyclical systemic risks compared to the previous quarterly review despite the favourable processes observable in the credit market. Though the turnaround of lending was achieved both in the household and corporate segments, 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 domestic lending activity of credit institutions.
Magyar Nemzeti Bank