The Bankʼs Financial Stability Council decided to move the deadline six months ahead from the original deadline of October 1.
In a further amendment, a de minimis rule will be introduced which will exempt financial institutions with less than HUF 3 billion in retail mortgage loan stock – considered non-significant players in the segment – from the requirement.
The amended MNB decree is expected to be published in the official gazette Magyar Közlöny at the beginning of March.
The MNB press release noted that the amendment of mortgage legislation, and the re-introduction of independent mortgage rights is necessary to make Hungarian regulations compatible with EU law and to create a sound mortgage bond market.
Legislative amendments aimed at supporting the financing of the existing loan stock through mortgage bonds is expected to be in place by the spring, the MNB said.
The MNB decided to introduce the 15% Mortgage Loan Financing Adequacy Ratio to mitigate the mismatch in maturities of forint mortgages, which have runs of ten years or more, and the banking sectorʼs forint liabilities, which typically mature within one year. The move could also support a revival of the mortgage-backed bond market and the increase of mortgages with longer interest periods and lesser lending risk, the MNB said.
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.
