MNB Keeps Countercyclical Capital Buffer Activation Schedule Unchanged

MNB

Image by Jessica Fejos

The Financial Stability Board of the National Bank of Hungary (MNB) has decided to leave the timing for the activation of the 0.5% countercyclical capital buffer rate unchanged at July 1, 2024, the central bank and financial market regulator said on Thursday, according to MTI.

MNB noted that until July 1, 2024, the 0% rate remains applicable to domestic exposures. Once the rate rises to 0.5% from July 1, it will be also be maintained from April 1, 2025, it added.

The policymakers had decided at a review in 2022 to increase the countercyclical capital buffer rate from 0% for the first time since 2016, citing cyclical systemic risks and the high and rising level of housing market overvaluation. At a review in June 2023, they postponed the activation by one year until July 1, 2024, "in view of the easing of cyclical systemic risks and those associated with housing market overvaluation".

 "The MNB will keep on continuously monitoring systemic risks in the banking sector and, depending on their development, will decide on the maintenance of capital buffer requirements on a quarterly basis," it added.

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