Budapest, 30 September 2021 – Based on the examined indicators and taking into account the long-term effects of the complex economic situation caused by the coronavirus pandemic, the level of cyclical financial systemic risks does not yet justify the imposition of a countercyclical capital buffer. Accordingly, the MNB's Financial Stability Board keeps the countercyclical capital buffer rate at 0 percent from 1 October 2021.
The Financial Stability Board (FSB) of the Magyar Nemzeti Bank (MNB) left the countercyclical capital buffer rate applicable to domestic exposures unchanged at 0 percent.
The main indicator on which the decision is based, the so-called credit-to-GDP gap has continued to close, i.e., the size of the loan stock relative to GDP has been approaching its estimated equilibrium value, but has still not reached it. The closing of the gap has slowed and it is expected to widen again in the coming quarters. This is mainly explained by the slowdown in loan growth compared to recent years and the improvement in GDP growth data as the economy restarts. In addition to the credit-to-GDP gap, the central bank also examines a set of cyclical system risk map overheating and vulnerability indicators when making decisions related to the capital buffer. The tracked indicators do not imply the need to prescribe a capital buffer. In particular, indicators related to the development of corporate lending, as well as the real estate price-to-income indicator, point to a slightly increasing level of cyclical systemic risk, which overall still does not require intervention.
Previous waves of the coronavirus pandemic, which became global in the spring of 2020, have had severe negative economic and financial consequences. The emerging economic shock also had a significant dampening effect on bank lending, which, in addition to the moderating effect of the moratorium on repayments, was maintained through significant government and central bank interventions. The domestic economy is recovering at an outstandingly fast pace, with the exception of the slower revival of some sectors, especially those affected by the pandemic. However, given the important role of government and central bank measures, a rapid rise in cyclical systemic risks is not yet expected. Overall, therefore, there is currently no justification for setting an effective capital requirement and starting to build a capital buffer.
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 rate of the countercyclical capital buffer applicable to domestic exposures on a quarterly basis.
Further information on the countercyclical capital buffer and other information necessary for the functioning thereof
Magyar Nemzeti Bank