29 June 2018
The Magyar Nemzeti Bank has made a decision on the countercyclical capital buffer rate applicable from 1 July 2018. The level of cyclical systemic risks is still moderate, and therefore the Financial Stability Council - with a view to supporting sustainable lending - has decided to maintain the rate at 0 percent.
The purpose of the countercyclical capital buffer is to increase the stability and resilience of the financial intermediary system across credit cycles. The MNB reviews the level of the countercyclical capital buffer on a quarterly basis.
Household lending shifted to a rising path in 2017, while corporate lending continued to grow dynamically. Despite the upturn, net credit outflow cannot be considered excessive in any segment, and the growth of the outstanding loans stock is occurring in a more sound structure than in the pre-crisis period. Domestic developments and their comparison with regional trends suggest that significant capacities are available for the expansion of lending in the current environment. Consequently, still no substantial change is observable in the level and dynamics of cyclical systemic risks. The value 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 a moderate level in cyclical systemic risks.
Accordingly, the Financial Stability Board of the MNB has decided to keep the countercyclical capital buffer rate applicable to domestic exposures at 0 percent. Foreseeably, no change is expected over the forthcoming one-year horizon, which may support the sustainable lending activity of credit institutions.
The development of cyclical risks in the domestic financial system may be impacted by financial developments of non-EU, so-called third countries where financial institutions with headquarters in Hungary have material exposures. Accordingly, the MNB monitors the developments in lending in material third countries for the Hungarian banking system and, if necessary, prescribes a countercyclical capital buffer rate for the exposures of domestic credit institutions in those countries.
Magyar Nemzeti Bank