MNB brings forward compliance deadline for liquidity coverage

EU

MNB headquarters in Budapest (Image by Jessica Fejos)

The National Bank of Hungary (MNB) said today that it will require banks to comply with a 100% liquidity coverage ratio (LCR) from April 1, 2016, Hungarian news agency MTI reported.

The LCR is a measure of the stock of unencumbered, high quality liquid assets that can be converted easily and immediately in private markets into cash to meet banksʼ liquidity needs for a 30-day liquidity stress scenario.

European Union legislation sets the minimum LCR at 60% from October 1, 2015, but the rules will raise the threshold gradually to 100% by the start of 2018.

The MNB announced in June its intention to raise the LCR ahead of schedule, with the aim of bringing it to 100% "as early as possible, in 2016".

In bringing forward the deadline for full compliance with the LCR rule, Hungary joins other EU member states such as the U.K. and the Netherlands, the MNB said today.

In parallel to the implementation of the LCR, the balance sheet coverage ratio and the deposit coverage ratio, currently in effect for dealing with the short-term liquidity position of credit institutions, will cease to function and be phased out from January 1, 2016.

An MNB decree on the measure is expected to be published in the official gazette Magyar Közlöny in September.

ADVERTISEMENT

Reforms to raise productivity would strengthen recovery - OE... Analysis

Reforms to raise productivity would strengthen recovery - OE...

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 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.