Budapest, 21 December 2023 – With regard to the housing and credit market risk developments, the Financial Stability Board of the MNB will not change the level of the countercyclical capital buffer rate, which will be activated at 0.5 percent from 1 July 2024.
The Magyar Nemzeti Bank (MNB) maintains the 0.5 percent countercyclical capital buffer (CCyB) rate effective from 1 July 2024 for domestic exposures, as of 1 January 2025. Until 1 July 2024, the 0 percent rate remains applicable to domestic exposures.
During the rate review in June 2022 , the MNB decided to increase the CCyB rate applicable to domestic exposures to 0.5 percent for the first time since 2016. During the rate review in June 2023, in view of the easing of cyclical systemic risks and those associated with housing market overvaluation, the MNB postponed the activation by one year to 1 July 2024.
In the last quarter cyclical and housing market risks continued to ease, which may continue in the short term as well. In the medium term, however, the recovery of the economic activity and the return of real wage growth might point to the return of increasing cyclical risks. Thus, no change is justified in the schedule of the countercyclical capital buffer build-up for the time being.
In June 2023, the MNB classified Albania, Montenegro, Russia, Serbia, Ukraine and Uzbekistan as material third countries. On the one hand, the financial processes of these countries can have an impact on the development of risks in the Hungarian banking system; on the other hand, the authorities of these countries operate in a legal and prudential framework different from that of the EU member states. Based on the assessment of the MNB, the level of cyclical systemic risks does not justify the imposition of a countercyclical capital buffer requirement in any of the examined countries. As of 1 January 2024, an unchanged countercyclical capital buffer rate of 0 percent will apply to Hungarian banks' exposures in these countries.
The MNB will keep on continuously monitoring systemic risks in the banking sector and prescribing the maintenance of additional capital buffer requirements depending on their development.
Magyar Nemzeti Bank