MNB to introduce new regulation to reduce external vulnerability
The National Bank of Hungary (MNB) will introduce a new foreign currency balance indicator (DEM) and will tighten the rules related to a banksʼ foreign currency compliance in order to reduce the banking sectorʼs dependence on short-term foreign liabilities and thereby the countryʼs vulnerability, the MNB told Hungarian news agency MTI today.
The central bankʼs Financial Stability Council approved the decrees on July 7, following consultations with the Hungarian banking sector and the European Central Bank. The new decree will take effect on January 1, 2016.
With the introduction of the new regulation, the banking sectorʼs short-term external debt could fall by as much as €3 bln to €7 bln, or 6% of total assets, by the end of 2016, the central bank said.
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