MNB keeps countercyclical capital buffer rate at 0%

MNB

Image by Jessica Fejos

The Financial Stability Board of the National Bank of Hungary (MNB) has decided to keep the countercyclical capital buffer rate at 0% from January 1, 2021, the central bank said on Monday, according to a report by state news wire MTI.

"The set of overheating and vulnerability indicators in the [MNB]'s cyclical systemic risk map...indicated a slightly increasing but still low level of cyclical systemic risk, despite the persistence of lending activity and the economic shock stemming from the coronavirus pandemic," the central bank said.

The central bank and financial market regulator introduced the countercyclical capital buffer in 2016 to mitigate the impact of future financial crises. MNB sets the rate at 0-2.5% of total risk-weighted assets each quarter in a decree. The rate has been 0% since the rollout of the buffer.

MNB said it reviewed and left unchanged the list of third countries that are "material" for the domestic banking system: Albania, Montenegro, Russia, Serbia, and Ukraine. OTP Bank, Hungary's biggest lender, has units in all of those countries.

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