MNB keeps countercyclical capital buffer at zero to prop lending

MNB

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The National Bank of Hungary (MNB) has decided to maintain the countercyclical capital buffer (CCyB) at zero in order to support lending growth, after its Financial Stability Board reviewed the rate, the central bank announced Monday, according to Hungarian news agency MTI.

The CCyB is designed to help counter procyclicality in the financial system. The rate has been zero since its introduction on January 1, 2016. The MNB reviews the rate, which is applicable to domestic exposures, on a quarterly basis. 

The Financial Stability Board said cyclical systemic risks remained low and it had not detected any significant change in the level or dynamics of systemic risks.

No change is expected in the rate over the next twelve months, which could aid the increase in commercial banksʼ domestic lending activity, the MNB said.

Member countriesʼ designated authorities have to notify the European Systemic Risk Board, which is part of the European System of Financial Supervision, of each quarterly setting of CCyB rates.

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