4 July 2019

The Magyar Nemzeti Bank intends to facilitate by its Green Program that the domestic financial intermediary system support environmental sustainability much more powerfully than at present. Therefore, the Bank is examining the possibility of a number of market development measures, concerning which it is launching a public professional consultation today.

The Magyar Nemzeti Bank (MNB) announced its Green Program in February 2019, in order to reduce the risks associated with climate change and other environmental problems, and to expand the financing of the green economy in Hungary.

Under the programme, the MNB implements several measures to encourage the increase of environmental awareness among Hungarian financial institutions and the greening of the products offered by them. As the first step, the MNB announced a contest for the financial institutions supervised by it, for winning the Green Finances Award for the year 2019. Another recent measure of the MNB aimed at creating - as one of the first central banks to do so - a separate green bond portfolio in the foreign currency reserve, a step that also fits the Green Program. As a next initiative, the MNB examined in detail and summarized in a study the possible measures aimed at launching and developing the domestic green finance markets.

Stronger integration of environmental considerations into banks’ risk management, the promotion of dedicated green retail financial products, or capital requirement regulation supporting green lending can contribute to constantly increasing the financing of environmental sustainability and climate protection investments in the future. Since the “green turnaround” in the financial system can only take place through a gradual, conscious process, the discussion paper also contains a number of structural measures. Examples for such structural measures include public awareness raising and demand stimulation, or even green financial research and specialist training.

During the summer, the Bank is looking forward to receiving comments and suggestions of the relevant stakeholders on the measures assessed by the MNB, included in the document submitted for public consultation today. The MNB will develop its final package of measures in the autumn of 2019 based on this feedback.

The consultation document is available on this link.