MNB said that due to the still high geopolitical and macroeconomic uncertainty, in line with the practice of European countries and the recommendation of international institutions, the Financial Stability Board has decided to increase the countercyclical capital buffer, state news wire MTI reports.
The notable profitability of banks and their strong capital position enable the application of the countercyclical capital buffer in a so-called positive neutral manner, that is, in periods preceding overheatedness.
Considering the prescription of a 1% buffer rate, according to the central bank's expectations, banks will still have approximately HUF 1.9 trillion free capital on the sector level, the entire use of which may enable the placement of up to HUF 24 tln in loans. Based on this the bank's ability to withstand shocks can be strengthened without negative lending effects by increasing the capital buffer requirement.
During the rate review in June 2022, MNB decided to increase the CCyB rate applicable to domestic exposures to 0.5% 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, MNB postponed the activation by one year to July 1, 2024.
The Financial Stability Board of MNB makes quarterly decisions on the applicable CCyB rate.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
