Budapest, 2 August 2021 - The Magyar Nemzeti Bank (MNB) has published the notice setting out the technical conditions of the Green Mortgage Bond Purchase Programme and the Mortgage Bond Rollover Facility and has decided to fine-tune the collateral management framework by improving the conditions of green securities.

On 6 July 2021, The Monetary Council reviewed and approved the MNB’s Green Monetary Policy Toolkit Strategy and decided to launch the Green Mortgage Bond Purchase Programme. The new programme is a targeted and effective tool to contribute to the development of a domestic green mortgage bond market and to promote green mortgage lending.

In line with the Monetary Council's decision, the MNB published the notice on the Green Mortgage Bond Purchase Programme on its website today. To promote green mortgage bond issuance and thereby support the construction and purchase of new and modern residential real estate, the MNB will purchase fixed-rate mortgage bonds with a green rating in accordance with international standards, denominated in HUF and issued with an original maturity of at least 5 years on the primary and secondary markets from 2 August 2021 onwards. To increase transparency in the green securities market, the MNB expects issuers and banks participating in the programme to publish regular sustainability reports and to develop customer information practices on green aspects, in addition to the market making obligations applied in the previous mortgage bond purchase programme. To support the stability of the mortgage bond market, the Mortgage Bond Rollover Facility will become available again.

In line with the MNB’s green monetary policy toolkit strategy, the Board has decided to amend the collateral management system. The most important change to the collateral management system is that the MNB will apply preferential haircut for green securities from 1 September 2021. The change in collateral management practices can strengthen financial stability and provide a further demand-side stimulus to the green asset market. In addition, due to the recent substantial boost in central bank liquidity, the MNB will cease to accept shares/units of investment funds as collateral from 1 September 2021. This adjustment will not affect collateral management of banks, as the role of shares/units of investment funds in collateral management practices has remained negligible in recent months.