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MNB report outlines use of macroprudential instruments

MNB

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In a new report published today, the National Bank of Hungary (MNB) presents the macroprudential instruments it has used recently to prevent and address systemic business and economic risks threatening banks, Hungarian news agency MTI reported.

The MNBʼs Macroprudential Report also examines the effects of the instruments and the adjustments made by market participants. 

“The publication intends to make the [MNB]’s macroprudential measures easier to follow and understand both for actors in the sector and the general public,” the central bank said.

Among the measures outlined in the report are the introduction of debt cap rules, set at 80% of collateral and 50% of borrowersʼ income; the prescription of a countercyclical capital buffer to mitigate the negative impacts of a potential financial crisis; the introduction of rules limiting the currency mismatch between banksʼ FX assets and liabilities; a rule requiring lenders to back at least 15% of their net mortgage loans with long-term liabilities; and the implementation of a systemic risk buffer.

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